A man walks past the Charging Bull statue during a snowstorm, Monday, Feb. 1, 2021, in New York's financial district. (AP Photo/Mark Lennihan)
By Damian J. Troise and Alex Veiga
Stocks notched broad gains on Wall Street Monday, clawing back some of their losses following the market's worst weekly loss since October.
The S&P 500 rose 1.6%. The benchmark index was coming off a 3.3% slide last week, when volatility spiked as online traders hoping to inflict damage on hedge funds fueled a frenzy in GameStop and a few other stocks.
Investors large and small continued to focus those stocks Monday, and GameStop slumped 30.8% to $225 a share, the latest rocky ride for the stock, which ended last year at about $18.
Meanwhile, the price of silver jumped at one point to its highest level in eight years. Analysts said the precious metal became another target for online investors seeking to go up against big Wall Street players.
A measure of fear in the market, the VIX, fell Monday, suggesting some of last week's market jitters were easing, said Pauline Bell, analyst at CFRA Research.
“Today the market is sensing that the heightened volatility that we saw over the last week is reverting to a more settled type of volume,” Bell said. “The market is sensing the return to normalcy.”
The S&P 500 gained 59.62 points to 3,773.86. The Dow Jones Industrial Average rose 229.29 points, or 0.8%, to 30,211.91. The Nasdaq composite climbed 332.70 points, or 2.6%, to 13,403.39.
The gains were broad, with technology companies leading the way higher. Communication stocks and a variety of companies that rely on direct consumer spending such as Starbucks and AutoZone also helped lift the market.
Smaller companies also notched solid gains. The Russell 2000 index of small-cap stocks picked up 52.52 points, or 2.5%, to 2,126.16.
Monday's steep drop in GameStop echoed what has become a typical move for a company that has regularly seen double-digit swings most of the last two weeks. Trading of the retailer was still limited on trading platforms like Robinhood.
Silver for March delivery rose $2.50, or 9%, to settle at $29.42 an ounce. Some analysts called the price jump the latest assault by the smaller investors who sent GameStop soaring recently. But many of those same traders instead called it a trap set by hedge funds to divert their attention away from GameStop, as the saga captivating Wall Street gets even more dramatic.
While volatility eased Monday, analysts said the market is likely to remain choppy as small investors continue to play a bigger role in stock trading than they have in the past.
“Definitely having easy access to information, encouragement on social media and a very easy trading experience has gotten more people involved,” said Sunitha Thomas, national portfolio advisor at Northern Trust Wealth Management. “All of that combined is going to lead to more volatility as investors with a shorter outlook are a bigger part of the daily trading volume.”
Investors are watching negotiations in Washington over President Joe Biden’s proposed $1.9 trillion economic aid package. Hopes for aid, along with the Federal Reserve’s pledge to keep low-cost credit plentiful, have carried the S&P 500 and other major indexes to record highs.
“Ultimately, what’s going to drive this recovery is consumer spending coming back,” Thomas said.
Investors bid up stocks heading into 2021 in expectation the rollout of coronavirus vaccines would allow global business and travel to return to normal. That optimism has been dented recently by new infection spikes and disruptions in vaccine deliveries.
Markets were rattled last week by AstraZeneca’s announcement it would supply the European Union with fewer than half the promised doses, which prompted the EU to impose export controls. On Sunday, AstraZeneca promised to increase European supplies and start delivery earlier. This helped boost shares of European companies on Monday. Germany's DAX rose 1.4%, France's CAC-40 gained 1.2% and the U.K.'s FTSE-100 added 0.9%.
The yield on the 10-year Treasury rose to 1.08% from 1.07% late Friday.
Deepwell Digital Therapeutics is a game development company looking to transform the way we look at video games — this time to improve health outcomes. Its goal is to create software to aid those who deal with conditions such as depression and ADHD. Company co-founder and co-CEO Ryan Douglas and co-founder Kate Edwards joined Cheddar News to talk about the technology is being used to help patients. "From a research perspective, the game industry itself has been well aware for many, many years of the kind of inherent, kind of anecdotal therapeutic value of playing games," said Edwards.
After a tough start amid the pandemic, lifestyle brand Magnolia Network, a collaboration between Chip and Joanna Gaines and Discovery, is pressing forward. Allison Page, the network's president, joined Cheddar to discuss the challenges and rewards of putting together the latest cable television content offerings from the Gaines team. "Really, behind the scenes, this is their vision, and we saw bits of it in Magnolia Journal, their fantastic magazine," Page said. "And just getting to bring that to life in a broader cable landscape has been such a joy and such a great opportunity." The accomplished television executive who moved over from HGTV also had encouraging words for women in the workplace as Women's History Month continues.
Nadia Brown, actor and host of 'The Green Room with Nadia Brown,' and Jenny Makholm, executive producer of the show and co-founder of Be An #ArtsHero/Arts Workers United, join Cheddar News to talk about their new Ovation TV series.
Actors Courtney B. Vance and Tosin Cole joined Cheddar News’ senior reporter Michelle Castillo at South by Southwest to talk about their new series “61st Street” on AMC. The show takes a look at the harshness of Chicago’s criminal justice system. When asked what he hopes the audience takes away from this show, Tosin Cole said, "Just some empathy and just showing a different perspective."
A recent survey from employment website Indeed and career growth platform Luminary found that at least half of women are considering a change to their careers over issues of unequal compensation and upward mobility as compared to men. Cate Luzio founder and CEO of Luminary, and Abbey Carlton, Indeed's global head of social impact, joined Cheddar News to talk about the study and working for women to push more self-advocacy. "I think the silver lining here is that women are in a moment where they can renegotiate the terms of work. And we're seeing that in this survey, women are thinking about what is my next step and what do I need in that next step. And compensation is right at the top of the list there,” said Carlton.
Allego, a European electric vehicle charging company, is officially public. With charging stations in 16 European countries and counting, Allego will play a strong supporting role in Europe's transition to clean energy, as its stations pull exclusively from renewable sources. Mathieu Bonnet, CEO of Allego, spoke with Cheddar's Opening Bell about its recent listing, the future of the EV industry, and what the Russia-Ukraine war means for the adoption of electric vehicles.
A new coalition called "Organizations For Pay Equity Now", or "OPEN" imperative, has launched with the goal of eliminating the gender pay gap among pre-IPO startups by 2027. More than 200 founders, CEOs and investors have already joined the coalition -- and it's only expected to grow. Emily Sweet, Lead of the OPEN imperative, joined Cheddar's Opening Bell to discuss the new coalition and how it plans to achieve these ambitious goals.
Netflix launching a test to let primary account holders pay an extra fee for users outside their households. This comes as the streaming giant grapples with illicit password-sharing with over 30 percent of all Netflix users sharing their password with at least one person, according to research firm Magid.
Pedro Palandrani, Director of Research at GlobalX joined Cheddar's Opening Bell to discuss.
Catching you up on what you Need to Know on Mar 21, 2022, with updates on the Russian invasion in Ukraine, a Boeing 737-800 plane carrying 132 people crashed in China, Canadian Pacific rail workers on strike, another possible COVID surge, and the SEC's new climate rules for businesses.
