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* J&J falls after COVID-19 vaccine study data
* GameStop is on the rise as brokerages ease the restrictions
* Honeywell decreases after earnings (market closing updates)
NEW YORK, Jan. 29 (Reuters) – US stock indexes fell in the close of Friday’s session with the biggest weekly drop in October as investors assessed the ramifications of Johnson & Johnson’s COVID-19 vaccine results, while a confrontation between hedging Wall Street funds and small and retail investors has increased volatility.
Johnson & Johnson dropped one of the heaviest weights for both the Dow and the S & P500, after the doctor said his single-dose vaccine is 72% effective in preventing COVID-19 in the United States, with a rate less than 66% observed globally.
The results are compared with the high bar set by two licensed vaccines from Pfizer Inc. / BioNTech SE and Moderna Inc., which were approximately 95% effective in preventing symptomatic disease in key studies when administered in two doses. Moderna shares have risen, while Pfizer shares have changed little.
Short-term worries that began earlier in the week resurfaced after an army of retail investors returned to trading shares such as GameStop Corp and Koss Corp, which rose further after brokers, including Robinhood, eased. some of the restrictions they put on trading.
“The big picture is that if there is bad news that suggests or indicates that there could be a longer hibernation period for us to be indoors and not consume or spend, which tends to restore the market and a lot of people are on the sidelines, especially with this news, “said Sylvia Jablonski, investment director at Defiance ETFs in New York.
“And then what happens to (Gamestop) and all that, people are a little afraid to trade.”
The increase in volatility has led to a huge increase in volume, totaling over 20 billion shares in each of the last two trading sessions in the US for the most active trading days recorded back in 2014, according to Refinitiv data.
The US Securities and Exchange Commission says it is closely monitoring any potential wrongdoing, both for brokerages and social media traders.
Unofficially, the Dow Jones industrial average fell 629.89 points, or 2.06%, to 29,973.47, the S&P 500 lost 74.61 points, or 1.97%, to 3,712.77, and the Nasdaq Composite decreased by 273.58 points, or 2.05%, to 13,063.58.
All three main indices suffered the biggest weekly drop since the end of October.
Market participants have speculated that the volatility caused by the short leaks has led to investor pressure, including Apple Inc., under pressure as hedge funds are sold to cover billions of dollars in losses.
Apple shares fell, while Microsoft also fell.
However, while concerns about rising COVID-19 cases and rugged vaccine launches have kept investors steady about a short-term pullback and increased volatility, the start of quarterly gains has eased some concerns about extensive stock assessments.
Of the 184 companies in the S&P 500 that reported earnings as of Friday morning, 84.2% exceeded analysts’ expectations, well above the 75.5% exceedance rate in the last four quarters, according to Refinitiv data.
Honeywell International fell after a 13% drop in quarterly profit.
The first known cases in the US of the South African variant COVID-19, found to be partially resistant to current vaccines and antibody treatments, were detected on Thursday in South Carolina.
Data shows that US labor costs rose more than expected in the fourth quarter amid rising wages, with opinions that inflation could accelerate this year, while another report showed that consumer spending in the US fell for the second month in a row in December.
Reporting by Chuck Mikolajczak; edited by Diane Craft