4 pm: GameStop stock loses almost half its value
The DJIA closed Thursday up nearly 300 points, 0.1%, at 30,603. The Nasdaq gained 67 points, 0.5%, to 13,337, and the S&P 500 improved 37 points, 1%, to 3,787. The gains come a day after Wall Street's worst day in months, and all 11 S&P 500 sectors closed up on the day, per CNBC.
GameStop Corp (NYSE:GME) shares took a beating after firms including Robinhood and Interactive Brokers intervened to prevent the buying of additional shares. The video game retailer's stock is still well above its value before reddit-inspired day traders bought en masse, but it tumbled 43% Thursday to $197.44.
12:25 pm: Traders on various platforms barred from buying GME, AMC, etc
The Dow was up nearly 600 points, about 2%, at 30,891, reversing Wednesday's losses. The Nasdaq Composite gained 183 points, 1.4%, to 13,454, and the S&P 500 picked up 70 points, 3,821.
GameStop Corp (NYSE:GME), subject of a widely discussed short squeeze led by day traders on r/wallstreetbets on Reddit, has continued to be extremely volatile. The stock jumped as high as $482.95 before falling to 265.31, a 24% decline from Wednesday's close.
Popular investment app Robinhood has blocked its users from buying additional GameStop shares, along with other stocks mentioned on wallstreetbets, including AMC Entertainment Holdings Inc (NYSE:AMC) and Nokia Corporation (NYSE:NOK).
"Short squeezes were due to retail traders snapping up stocks like Gamestop," CMC Markets UK analyst David Madden wrote. "There was a fear that other investment firms might start dumping stocks just to exit the market. Sentiment in equities has since improved as those worries in relation to hedge funds have faded."
10:20 am: Proactive North America headlines:
VolitionRx Limited (NYSEAMERICAN:VNRX) says National Taiwan University Hospital presented data on its Nu.Q assay performance at World Conference on Lung Cancer
XPhyto Therapeutics Corp (CSE:XPHY) (OTCQB:XPHYF) (FRA:4XT) lays out strategic priorities and drug development milestones for 2021
Group Eleven Resources Corp (CVE:ZNG) (OTCMKTS:GRLVF) (FRA:3GE)eyes follow-up drilling at Carrickittle prospect in Ireland beginning next month
ImagineAR Inc (CSE:IP) (OTCQB:IPNFF) (FRA:GMS1) touts $150K augmented reality deal to enhance IMP auto show app
CO2 GRO Inc (CVE:GROW) (OTCQB:BLONF) (FRA:4021) in commercial feasibility study with Plant Advanced Technologies in France
American Battery Metals Corporation (OTCQB:ABML) wins $4.5M DOE grant to produce battery cathode lithium hydroxide
Ximen Mining Corp (CVE:XIM) (OTCQB:XXMMF) (FRA:1XMA) picks up more claims, including two historic mines, near the Kenville gold project
Tinka Resources Limited (CVE:TK) (OTCPINK:TKRFF) (FRA:TLD) hails latest drill assays from Ayawilca, which includes one of the best grade intersections to date
BetterLife Pharma Inc (CSE:BETR) (OTCQB:BETRF) (FRA:NPAU) partners with Eurofins Discovery for pharmacology studies of Eurofins' LSD-derived molecule TD-0148A
Tetra Bio-Pharma Inc (TSE:TBP) (OTCQB:TBPMF) (FRA:JAM1) r to raise C$1.9M via a non-brokered private placement
9:45 am: Wall Street benchmarks open in green
The main Wall Street indices managed to open in the green on Thursday morning after a reassuring set of weekly jobless figures.
In the early minutes of trading, the Dow Jones Industrial Average was up 0.9% at 30,575 while the S&P 500 climbed 0.8% to 3,782 and the Nasdaq rose 0.6% to 13,352.
Market sentiment may have received a bump from the US jobless claims for the week to January 23, which came in at 847,000, down from 914,000 in the prior week but still at an elevated level.
The US jobless rate may also remain high for some time after US GDP data showed the economy grew 4% in the fourth quarter but for the whole of 2020 shrank 3.5%, its worst year since 1946.
Meanwhile, the frenzy over at GameStop was still managing to continue, albeit at a much slower pace, with the shares up 1.6% at US$351.82 in early deals.
8:15 am: Wall Street set for balanced open
US markets are expected to stabilise at the outset after a day yesterday when indices plunged and some stock market stars disappointed.
Spread betting quotes indicate the Dow Jones Industrial Average, which lost 2% of its value yesterday, will edge 36 points higher to open at around 30,339.
The S&P 500, down 2.6% yesterday, is expected to open little changed while the tech-heavy Nasdaq Composite, also down 2.6% yesterday, is expected to open around 211 points weaker at 13,060, thanks in part to glamour stocks Tesla Inc (NASDAQ:TSLA) and Apple Inc (NASDAQ:AAPL) losing favour.
Apple shares were lower in pre-market trading, despite the electronic gizmos pedlar topping forecasts with sales of its iPhone.
The Cupertino-based firm generated a mind-boggling generated revenue of US$111.4bn in its fiscal first quarter, compared to US$91.82bn in the same quarter a year ago and the market consensus forecast of US$103.27bn.
Tesla, the electric vehicle maker, also topped market forecasts on sales but fell short on earnings; the shares were off by around 2% in pre-market trading.
Fourth-quarter adjusted earnings per share of 80 cents fell well below Wall Street’s best guess of US$1.02 per share.
The company’s founder, Elon Musk, said he plans to remain in charge of the company for several years yet, which will come as a relief to those Tesla fans worried he might give up the gig to day-trade GameStop Corp (NYSE:GME).
The stock everyone – including Musk – seems to be talking about more than doubled in pre-market trading on (of course) zero news flow, other than the multitude of opinion pieces, message board postings and Tweets about the highly volatile stock of a loss-making old-fashioned bricks & mortar video games retailer.
Meanwhile, in the boring old world of macroeconomics, US gross domestic product data is due out in less than an hour.
“The market is going for +4.2% qoq SAAR, which works out to +1.0% qoq, in case you’re interested,” explained Marshall Gittler of BDSWiss, helpfully – although it might have been more helpful had he explained what qoq (quarter-on-quarter) and SAAR (seasonally adjusted annualised rate) are.
“The various Feds have their forecasts too, ranging from +2.6% for NY Fed Nowcast, +3.2% for the St. Louis Fed, to 7.5% for the Atlanta Fed’s GDPNow,” he added.
“The GDP figure is important not only as a measure of how the economy was doing then but also as the baseline for how it’s doing now. Most forecasters expect Q1 growth to be positive, too, but much depends on the fiscal package that the Biden administration is hoping to pass. Given the uncertainty around that package, the Q4 GDP figure is perhaps less important than it would normally be,” Gittler postulated.
Four things to watch for on Thursday:
- Earnings season continues to roll on, with fast food giant McDonald’s Corp (NYSE:MCD) and payment giants Visa Inc (NYSE:V) and MasterCard Inc (NYSE:MA) scheduled to report quarterly numbers
- Other results in the diary are media giant Comcast Corp (NASDAQ:CMCSA) and food giant Mondelez International Inc (NASDAQ:MDLZ)
- On the macro front, US jobless claims for the week to January 23 will be delivered alongside the US GDP data for the fourth quarter of 2020
- The market may also be interested in US new home sales for December as well as the Kansas Fed manufacturing index for January