New York Stock Markets, Game Stop Overheating Concerns, J&J Vaccine Disappointment Starts Down
(New York = Yonhap News) Oh Jin-woo, correspondent for Yonhap Infomax = Major indices in the New York stock market started down on the 29th. It can be interpreted as being attributable to concerns over excessive stock price fluctuations in some stocks, such as Gamestop, and disappointment over the vaccine effect announced by Johnson & Johnson (J&J).
As of 9:58 a.m. (Eastern Time), the Dow Jones 30 Industrial Average on the New York Stock Exchange (NYSE) traded at 30,369.29, down 234.07 points (0.76%) from the battlefield.
The Standard & Poor’s (S&P) 500 index fell 23.78 points (0.63%) from the battlefield to 3,763.60, while the technology stock Nasdaq index fell 75.66 points (0.57%) to 13,261.50.
The market watched the overheating pattern of some stocks, such as Game Stop, the news of the novel coronavirus infection (Corona 19) vaccine, and major economic indicators.
Excessive volatility, centered on some stocks, is a pattern that raises the market’s overall anxiety.
Recently, as individual investors intensively invested in some stocks such as Gamestop and AMC, the stock price has fluctuated rapidly.
Analysts suggest that if the stock price of the stock rises, hedge funds in short-selling positions are forced to lose, and they face a situation where they are forced to sell other stocks they hold in order to prepare margin.
On the previous day, Robin Hood, an online brokerage company mainly used by individual investors, announced that it would restrict trading on overheated stocks such as Game Stop, and the stock prices of these companies fell sharply.
However, as Robin Hood changed its position to allow some transactions again, the stock price of the company is on the rise again. Gamestop’s stock price rose more than 100% in the early part of the market, and AMC’s stock price rose more than 70%.
The market as a whole has become unstable again due to a sharp rebound in stock prices such as Game Stop.
The news about the Corona 19 vaccine also somewhat disappointed investors.
J&J announced that the vaccine under development had an average of 66% preventive effect. In the US, the preventive effect recorded 72%. On the other hand, in South Africa, the prevention effect was found to be only 57%.
Concerns have risen over whether it will be less effective against the mutant virus.
Controversy over the supply disruption of the vaccines that have already been developed continues.
In particular, the conflict between AstraZeneca and the European Union is deepening over the issue of vaccine supply.
The US economic indicators released on the day were better than expected, but they did not alleviate market uncertainty.
According to the Ministry of Commerce, personal consumption expenditure (PCE) in December decreased 0.2% (seasonally adjusted value) from the previous month. It was better than the 0.7% decline in November, and better than the 0.4% decline in expert estimates compiled by The Wall Street Journal.
In December, personal income (after tax) increased 0.6% from the previous month. It increased significantly from the 0.1% increase expected on Wall Street.
According to the Supply Management Association (ISM)-Chicago, the Chicago Purchasing Managers Index (PMI) for January rose to 63.8 from 58.7 last month. The highest since July 2018. The expert’s estimate of 58.5 was also slightly exceeded.
New York stock market experts expressed anxiety about overheating some stocks.
SYZ Private Bank Investment Representative Luke Phillip said, “The story of GameStop, where individual investors emerged as new players in the market, is a difficult variable to ignore.” “There is a very important link with hedge funds that took a short position in these stocks.” .
“These funds are selling other stocks they hold to make up for the loss of their short positions, which puts a strain on the market as a whole,” he said.
Stock markets in major European countries are also weak. The pan-European index Stoxx 600 fell 1.58%.
International oil prices have risen. The price of Western Texas crude oil (WTI) for March was up 1.18% to $52.96, and Brent was up 1.06% to $56.12.
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