NEW YORK (dpa-AFX) – Out of disappointment over a lack of stimulus from the US Federal Reserve (Fed), Wall Street went downhill on Wednesday. Stock marketers also pointed to concerns that have recently risen that stocks are now generally overvalued after the latest record rally. The most important US stock market indices fell between 2.1 and 2.8 percent.
The leading index Dow Jones Industrial (Dow Jones 30 Industrial) lost 2.05 percent to 30,303.17 points. The market-wide S&P 500 slumped 2.57 percent to 3750.77 points. Both standard value indices have thus been in the red again since the beginning of the year. The technology-heavy NASDAQ 100 fell by 2.80 percent to 13 112.65 points. Its annual balance sheet so far shows an increase of almost 2 percent.
After its first meeting of the current year, the Fed announced that it would keep the key rate between 0 and 0.25 percent. Stockbrokers were disappointed that Federal Reserve Chairman Jerome Powell had not promised any new aid for the economy in view of the virus pandemic.
Portfolio manager Thomas Altmann from QC Partners also wrote that the Fed sees a slowdown in the economic recovery. While this is bad for the stock market per se, it shouldn’t really come as a surprise. After all, the economic indicators have recently turned more downwards.
The focus was on otherwise mixed reactions to quarterly reports in the middle of the week, but also on the ongoing distortions in stocks that were previously popular with short speculators. So it was a matter of utilizing good Microsoft figures. The software giant significantly exceeded expectations in the past quarter, thanks in particular to a strong cloud business. This is a welcome surprise for investors, said analyst Raimo Lenschow of Barclays Bank. He sees Microsoft as a kind of mandatory investment in a volatile year. The shares rose 0.3 percent in the very weak environment.
At the top of the Dow, 3M’s shares increased their price gains significantly from the previous day and rose by around six percent. The conglomerate had positively surprised on Tuesday with a business development that was recently above expectations. Now the analysts at JPMorgan wrote that the shares were “valued too low to be ignored”.
At the end of the Dow, Boeing’s shares lost around four percent. The corona crisis, the debacle surrounding the 737 Max crash jet and new delays in the 777X large-capacity jet had caused the aircraft manufacturer a record loss in 2020.
In the recently overheated tech sector, investors took profits on some stocks. As it was said, they were relying on recently below average values. The chip companies AMD (AMD (Advanced Micro Devices)) and Texas Instruments had given optimistic outlooks, but the shares were down 6.2 and 5.0 percent respectively.
The biggest headlines, however, continued to be made by the roller coaster shares of the troubled computer game retailer Gamestop (Gamestop A), which for days have been subjected to the test of strength between so-called short speculators and their opponents. The latter is said to have recently mobilized in Internet forums, on Wednesday they were still on the lever.
Among the short sellers as “victims” who have bet on falling prices, the name of the hedge fund Melvin Capital was most recently mentioned. According to statements by a manager to the television broadcaster CNBC, it has now completely closed its short positions in Gamestop. The jump in stocks is not over for the time being, however: the shares had soared to a record high of $ 380 and closed 135 percent up.
Buy-in by short sellers also drove the shares of the world’s largest cinema chain AMC (AMC Entertainment A), which was recently traded as a bankruptcy candidate, to astronomical heights. In the end, there was an increase of 301 percent.
The euro came under pressure on the foreign exchange market and was most recently quoted at 1.2112 US dollars. Statements by ECB Council member Klaas Knot caused a burden. In an interview with the television channel Bloomberg TV, the governor of the central bank of the Netherlands made it clear that the European Central Bank had instruments at its disposal that could be used against an excessive rise in the euro if necessary. The ECB set the reference rate at $ 1.2114 (Tuesday: 1.2143). The dollar cost 0.8254 (0.8235) euros.
The futures contract for ten-year Treasuries (T-Note Future) rose 0.12 percent to 137.54 points in view of the slump on the stock market. In return, the yield on the ten-year bond fell to 1.01 percent./la/he
— By Lutz ALexander, dpa-AFX —
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