Dow Drops 500+, Other Indexes Fall from Record Highs
January 27,2021 10:05 am EST
U.S. stocks fell sharply on Wednesday as investors pored through mixed earnings from major companies and awaited the latest policy decision from the Federal Reserve.
The Dow Jones Industrials plummeted 509.31 points, or 1.7%, to 30.427.73.
The S&P 500 slipped 72.8 points, or 1.9%, to 3,778.82
The NASDAQ demurred 262.3 points, or 1.9%, in Wednesday''s first hour to 13,363.77.
Boeing fell more than 3% after its earnings report showed 2020 net loss hit a record of $11.9 billion amid the 737 Max grounding and the coronavirus pandemic.
Shares of AMD tumbled more than 7% even after the chipmaker posted revenue and earnings that beat Wall Street''s already high expectations.
Microsoft was up slightly after reporting a stellar quarter. Sales grew by 17% on a year-over-year basis in its fiscal second quarter, while its cloud business accelerated.
Starbucks topped earnings estimates for the last quarter, but its U.S. same-store sales fell 5% amid rising cases of Covid-19. Shares of the coffee chain fell more than 3%.
Apple, Facebook and Tesla are due to report earnings after the closing bell. They represent three of the six largest companies in the U.S. by market cap, meaning fluctuations in their stock prices have an outsized impact on the performance of the broader S&P 500.
Intensifying speculative behavior among retail investors is causing many on Wall Street to raise a red flag. Heavily shorted names, including GameStop and AMC Entertainment, continued to be pushed higher by amateur day traders in online chat rooms.
GameStop shares exploded again, more than doubling on Wednesday. Media outlets learned Melvin Capital, the hedge fund targeted by the retail crowd on Reddit had sold out of its short position. AMC was up more than 300%.
Investors will also keep a close eye on comments from Fed Chairman Jerome Powell, who is expected to speak with reporters during a press conference Wednesday afternoon following the Fed''s latest interest rate decision.
The central bank chief will likely explain how the Fed views the economic outlook and offer remarks about what, if any, monetary actions are needed to help further stabilize the U.S. economy.
Prices for 10-Year Treasurys were higher, lowering yields to 1.01% from Tuesday''s 1.04%. Treasury prices and yields move in opposite directions.
Oil prices lost 44 cents to $52.17 U.S. a barrel.
Gold prices faded $17.40 to $1,833.50 U.S. an ounce.
Currencies