Dow rebounds day after short-selling sparked selloff helped lead to worst drop in 3 months; GameStop, AMC get pounded
U.S. stock indexes ended higher Thursday afternoon, but off the best levels of the session, as investors focused on earnings reports and economic data following steep losses for major indexes on high trading volumes on Wednesday. Investors continued to monitor volatile trading in shares of GameStop Corp. that underlined concerns about speculative excess. The Dow Jones Industrial Average [: DJIA] rose around 300 points, or 1%, at 30,603, the S&P 500 index gained 1% to 3,787, but finished off its best level around 3,830, while the Nasdaq Composite Index closed 0.5% higher at 13,337, but also off its intraday peak at 13,508. All closing levels are based on preliminary levels. Markets focused on a raft of earnings on Thursday as well as economic updates on gross domestic product and jobless claims, which momentarily overshadowed the action in GameStop and AMC Entertainment Holdings [: AMC], among a batch of stocks that have been the talk of Wall Street as Main Street , as they are the center of a battle between professional investors betting that shares of those stocks will fall in value and average investors attempting to push the value of those heavily shorted companies ever-higher. On Thursday, shares of GameStop sank 44% on Thursday but are still holding onto a nearly 200% gain so far this week. Those for AMC ended down 57% and are up 146% so far this week. A reading of those seeking initial jobless claims in the week ended Jan. 23, fell by 67,000 to a seasonally adjusted 847,000, marking the lowest level in three weeks, but layoffs were still high early in 2021 as the economy wrestled with a winter surge in the coronavirus. Separately, a report on U.S. economic growth, or GDP, showed that the economy grew at a modest 4% annual pace in the final three months of 2020.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
