Major stock indexes end with modest gains on Wall Street
Stocks closed modestly higher on Wall Street Wednesday as investors turn their focus to some strong earnings reports from Big Tech companies and hopes for getting more economic stimulus passed in Washington
BANGKOK — Wall Street capped a choppy day of trading with modest gains Wednesday, as investors focused on some strong earnings reports from Big Tech companies while remaining cautiously optimistic that Washington will deliver more economic stimulus.
The S&P 500 inched up 0.1% after swinging between a gain of 0.6% and a loss of 0.3%. The tiny gain extended the benchmark index’s winning streak to a third day. Energy, communications and financial stocks helped lift the market. Those gains were primarily kept in check by declines in companies that rely on consumer spending and technology stocks. Treasury yields and oil prices rose.
Investors continued to watch shares of companies such as GameStop and AMC Entertainment, which have been targeted by a community of online investors seeking to force their stock prices higher. Both stocks rose modestly after plunging over the last two days. Both companies have been in the spotlight for more than two weeks as investors pushed the stocks to astronomical levels.
“There’s a tug of war that’s been brewing for a week or so now, that markets are ripe for a correction and whether the events of last week are a precipitating event,” said Jamie Cox, managing partner at Harris Financial Group.
The S&P 500 rose 3.86 points to 3,830.17. The Dow Jones Industrial Average gained 36.12 points, or 0.1%, to 30,723.60. The tech-heavy Nasdaq slipped 2.23 points, or less than 0.1%, to 13,610.54. The index had briefly been above its all-time high set last week.
Smaller companies fared better than the broader market. The Russell 2000 small-caps index rose 8.26 points, or 0.4%, to 2,159.70. The index is up 9.4% this year, while the S&P 500 is up about 2% and the Nasdaq is up 5.6%.
Stocks have been mostly rallying this week, an encouraging start to February after a late fade in January as volatility spiked amid worries about the timing and scope of another round of stimulus spending by the Biden administration, unease over the effectiveness of the government’s coronavirus vaccine distribution and turbulent swings in GameStop and other stocks hyped on social media.
That volatility has subsided this week, with Wall Street focusing mainly on corporate earnings reports while it keeps an eye on Washington for signs of progress on a new aid package.
Democrats and Republicans remain far apart on support for President Joe Biden’s $1.9 trillion stimulus package, but investors are betting that the administration will opt for a reconciliation process to get the legislation through Congress.
Meanwhile, shares of Amazon dropped 2% even though the company reported a huge rise in quarterly profits. Amazon also said its founder and CEO Jeff Bezos would be stepping down as CEO to focus on broader work at the company.
Google’s parent company, Alphabet, jumped 7.3% after reporting a blowout quarter as its digital advertising machine regained momentum.
GameStop and other recently high-flying stocks notched modest gains Wednesday. GameStop rose 2.7% and AMC climbed 14.7%. The stocks have been caught up in a speculative frenzy by traders in online forums who seek to inflict damage on Wall Street hedge funds that have bet the stocks would fall. GameStop plunged 60% on Tuesday, and AMC Entertainment lost 41.2%.
Treasury Secretary Janet Yellen has called for a meeting with the Securities and Exchange Commission, Federal Reserve and others to discuss the recent volatility and to determine “whether recent activities are consistent with investor protection and fair and efficient markets,” White House press secretary Jen Psaki said.
GameStop, whose shares have traded mostly on investor opinion instead of actual company news, announced it was hiring Matt Francis, formerly an engineering leader with Amazon Web Services, to the newly created role of chief technology officer.
The vaccine rollout is also becoming more organized and picking up steam.
“That’s very supportive of markets,” Cox said. “The events that will determine the outcome of 2021 are obviously how fast to we reach a point where the world can operate and function more normally.”
Energy companies rose as the price of crude oil jumped 1.7%. Exxon Mobil rose 3.9% and Schlumberger gained 7.4%.
The yield on the 10-year Treasury rose to 1.13% from 1.09% late Tuesday.
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AP Economics Writer Josh Boak contributed.
