US Stocks Fall Sharply Wednesday 01/27 09:31
Stocks were broadly lower in early trading on Wall Street on Wednesday, as
investors focus on the Federal Reserve's policy meeting and the outlook for the
economy as the coronavirus pandemic rages on.
(AP) -- Stocks were broadly lower in early trading on Wall Street on
Wednesday, as investors focus on the Federal Reserve's policy meeting and the
outlook for the economy as the coronavirus pandemic rages on.
The S&P 500 was down 1.5% in early trading, dragged lower by technology
stocks like Amazon and Facebook as well as materials and energy stocks. The Dow
Jones Industrial Average was down 1.5% as well, while the Nasdaq composite was
Investors are waiting to hear from the Federal Reserve at around 2 p.m.
Eastern Time today. The Fed is expected to keep its extremely supportive policy
stance unchanged given the slow progress in vanquishing the pandemic, analysts
Along with the Fed, this is the busiest week so far of quarterly earnings
reporting season for U.S. companies. Apple and Facebook will report their
quarterly results after Wednesday's closing bell.
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. As a whole, analysts
expect S&P 500 companies to say their fourth-quarter profit fell 5% from a year
earlier. That's a milder drop than the 9.4% they were forecasting earlier this
month, according to FactSet.
Shares of GameStop soared 90% in early trading, as the video game retailer
remains in a tug-of-war with Wall Street institutions and an activist community
of mostly online investors. The online investors have bet that hedge funds have
put too much money betting against the stock --- a concept known as selling
"short." A pair of professional investment firms that placed big bets that
GameStop's stock would crash have largely abandoned their positions.
Markets have meandered 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 coronavirus might delay a recovery
from the pandemic.
With the virus spreading like "wildfire" in parts of the world, the first
half of the year might be "lost," Stephen Innes of Axi said in a commentary. "
Some are even concerned that vaccines may not prove useful enough to eradicate
the virus. And these concerns will continue to linger over markets like a dark
cloud until vaccine distributions get ironed out, and a definitive drop in
contagion levels can thoroughly support the vaccine efficacy results."
The reality that President Joe Biden's $1.9 billion stimulus package won't
be "rubber stamped" by the U.S. Senate is also weighing on sentiment, Jeffrey
Halley of Oanda said in a report.
The fate of Biden's plan to send $1,400 to most Americans and deliver other
support for the economy remains uncertain given the slim majority of the
Democrats in the Senate. But on Tuesday, Senate Majority Leader Chuck Schumer
said Democrats are prepared to push ahead with the relief package, even if it
means using procedural tools to pass the legislation without Republicans.