Stocks claw back some lost ground; GameStop swings wildly
Stocks closed broadly higher on Wall Street on Thursday, helping the market recoup some of its losses a day after its biggest pullback in nearly three months.
Investors continued to closely watch the wild swings in GameStop, AMC and several other stocks that have become targets for hordes of online investors who have sent them skyrocketing in recent days, taking on big hedge funds that have bet they will fall.
Several of those stocks fell sharply after Robinhood and other trading platforms restricted trading in them, causing an outcry among customers. The chaotic trading action is drawing calls in Washington and elsewhere for regulatory action to curb the speculative frenzy.
The Standard & Poor’s 500 rose 36.61 points, or 1%, to 3,787.38, lifting the benchmark index out of the red for the year. It had lost 2.6% a day earlier, its biggest drop since October.
The Dow Jones industrial average gained 300.19 points, or 1%, to 30,603.36. The Nasdaq composite added 66.56 points, or 0.5%, to 13,337.16. The Russell 2000 index of smaller companies slipped 2.09 points, or 0.1%, to 2,106.61.
GameStop skidded 44.3% to close at $193.60, after swinging in a gigantic range between $112 and $483. At the beginning of the year it was less than $18. Meanwhile, AMC Entertainment fell 56.6%, after rising nearly 600% this month alone.
Investors also continued to focus on company earnings. More than 100 companies in the S&P 500 are scheduled to tell investors this week how they fared during the last three months of 2020.
Apple fell 3.5% after the iPhone maker posted a record quarterly profit, helped by big sales of iPhones and Apple Watches during the holiday season. Investors focused on the fact that Apple was conservative in its full-year outlook for 2021. The company cited economic uncertainty and the pandemic as part of the reason for the forecast.
Meanwhile, hopes are high for President Biden’s proposed $1.9-trillion COVID relief package, but worries are growing the plan might be scaled back. Adding to caution, the Federal Reserve said Wednesday it would keep its low interest rate policies in place, but it also released a sobering assessment of the gradual recovery ahead.
Markets had been meandering near record highs since last week as investors weighed solid corporate earnings results against renewed worries that troubles with COVID-19 vaccine rollouts and the spread of new variants of the coronavirus might delay a recovery from the pandemic.
