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Greenwich, Connecticut is home to many US hedge funds.
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Global shares were bruised on Thursday, reacting to the forced sale of hedge funds, after the unprecedented retail investor made efforts to buy short-term securities. Major US stock indices were mixed, but fortunately they calmed down after a hard Wednesday.
Shortly after opening,
Dow Jones Industrial Average
increased by 263 points, or 0.9%, while
S&P 500
gained 0.8% and
Nasdaq Composite
added 0.7%.
In Asia, which had a hot start until 2021,
Nikkei 225
ended 1.5% below and
Hang Seng
decreased by 2.6%.
Stoxx Europe 600
returned from previous sharp losses to trading down 0.2%.
S&P 500
It ended 2.6% lower on Wednesday, the worst record in October.
The financial turmoil was caused by the organized purchase of companies, including video game retailers
GameStop
(ticker: GME), software company
Blackberries
(BB) and the cinema chain
AMC Entertainment
(AMC), which had a disruptive financial performance, which led many institutional actors to reduce their stocks.
“Retail buying forced several large hedge funds to buy the stock back as soon as possible to limit the damage. [GameStop] it was the most traded stock in the US for the second day in a row, in the middle of the earnings season, ”said Marshall Gittler, head of investment research at BDSwiss.
GME resources
(GME.AU), the Australian mining company that shares nothing with GameStop other than its GME symbol, has grown 13% in Sydney.
Mark Haefele, investment director for global wealth management at UBS, said the outlook remains bright, noting the 68% jump for the S&P 500 from the March 2020 lows.
“After a rally of this magnitude and with actions close to record highs, it is understandable that short-term uncertainty leads to increased volatility. In our opinion, however, attention will probably return to gains, stimulus and the launch of the vaccine. We believe that the medium-term path of the market remains higher “, he said.
GameStop-driven frenzy eclipses a key day for earnings and economic news.
Gross domestic product rose 4% in the fourth quarter, missing estimates of 4.3%, while jobless demand improved to 847,000 from 900,000 last week and exceeded expectations for 875,000.
Apple
Shares (AAPL) fell 2.2% after the company said it earned $ 1.68 per share, compared to estimates of $ 1.41. The company posted revenue of $ 111 billion, exceeding expectations of $ 103 billion.
Tesla
Shares (TSLA) fell 5.3% after the electric vehicle manufacturer registered a mixed quarter. The company earned 80 cents a share, missing estimates of $ 1.03, while recording revenue of $ 10.74 billion, compared to a forecast of $ 10.4 billion.
Facebook
Shares (FB) gained 4.9% after the company exceeded revenue and earnings expectations, recording a profit of $ 3.88 per share compared to estimates of $ 3.22, at revenues of $ 28 billion, exceeding expectations of $ 26.4 billion.
McDonalds
(MCD) rose 0.5% even after the company missed expectations. The fast food chain said it earned $ 1.70 a share, down from its estimated share of $ 1.78, with revenue of $ 5.31 billion, below expectations for $ 5.37 billion.
Twitter
(TWTR) rose 2.7% on a technology-poor day as KeyBanc updated its stock to overweight in the industry.
Write to Steve Goldstein at [email protected] and Jacob Sonenshine at [email protected]