The major index fell sharply on the New York Stock Exchange.
Disappointment with the results of the Federal Open Markets Commission (FOMC) and the possibility of forced stock sales due to losses from short selling of some hedge funds are believed to have put pressure on investors.
On the 27th (US time) on the New York Stock Exchange (NYSE), the Dow Jones 30 Industrial Average ended trading at 30,303.17, a sharp drop of 633.87 points (2.05%) from the battlefield.
The Standard & Poor’s (S&P) 500 index closed 98.85 points (2.57%) from the battlefield at 3,750.77, while the technology stocks Nasdaq index fell 355.47 points (2.61%) to 13,270.60.
The S&P500 index returned all of the gains this year.
The Dow Index recorded the biggest drop in the day since the end of October last year.
The market watched the results of the FOMC, the performance of major companies such as Apple, and the aftermath of rapid fluctuations in the prices of some stocks such as Gamestop.
The leading index was unstable from the beginning of the market.
Ahead of the performance announcements of major technology companies such as Apple, Tesla, and Facebook, the stock prices of those companies have already risen significantly, resulting in a level burden.
In addition, the sharp fluctuations in the stock price of Gamestop, a US game-related retailer, and AMC, a movie theater chain, made the overall market unstable.
The stock prices of these companies are on the rise as individual investors have recently shown a intensive buying trend targeting Gamestop and AMC.
There was also news that some hedge funds, such as Melvin Capital, which took a short selling position with the company, were unable to overcome the individual’s buying trend and withdrew their short positions.
Gamestop’s stock price soared about 134% on that day.
AMC shares soared about 300%.
The problem is that a hedge fund that suffered massive losses from its short short position could be forced to sell other stocks it holds to make up for the loss.
In the market on this day, a diagnosis was poured out that the movement of forced stock selling by hedge funds due to short selling losses was being detected.
The Federal Reserve System (Fed and Fed) also failed to ease market uncertainty.
The Fed did not change interest rates or asset purchases as expected at FOMC on the day.
There was no change in guidance on the policy.
Fed Chairman Jerome Powell reiterated his position that it is early to discuss tapering (reduction of bond purchases), and that he will fully inform the market before tapering and implement it gradually.
Although Chairman Powell has reduced concerns over premature tapering, the market has expressed disappointment that the possibility of further easing has not been clearly presented.
The Fed assessed that the recent economic recovery has slowed, but expressed the view that the mid-term economic outlook has improved somewhat.
Major indices expanded further after the FOMC results and the press conference of Chairman Powell.
The continued concern about the disruption in the supply of a novel coronavirus infection (Corona 19) vaccine also made investors uneasy.
Points are steadily raised that the vaccine supply may not be smooth, as it is expected that AstraZeneca will supply less than planned supply to Europe.
White House spokesman Jen Saki wants a strong and clear investigation into the theory of the origin of Corona 19 in China, and the opinion that it is necessary to restrict the use of Chinese products such as Huawei is also a factor that hindered investment sentiment.
In the early days of taking office, Biden’s administration is stimulating concerns that the recovery of bilateral relations will not be easy, with a hard message on China day after day.
Meanwhile, Boeing’s share price fell by 4% on that day.
Results were sluggish, with losses in the fourth quarter far greater than market expectations.
All industries fell by industry on this day.
Communication fell by 3.82%, and industrial leaders also fell by 2%.
The economic indicators released that day were also sluggish.
The US Department of Commerce announced that December durable goods orders increased 0.2% from the previous month.
Compared to the 1.2% increase in November, the increase has decreased significantly.
It fell short of the 0.8% increase in the market forecast compiled by The Wall Street Journal.
New York stock market experts expressed concern over delays in vaccine supply.
“The delay in vaccine supply and continuing containment measures are a double punch for investors,” said Hani Redha, portfolio manager at Finebridge Investments. “I think the market was expected to discuss mitigation rather than strengthening of containment by now.” said
On the Chicago Options Exchange (CBOE), the volatility index (VIX) rose 61.64% from the previous trading day to 37.21.
/yunhap news
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