Dow plummets 726 points for worst day of 2021 as virus variants threaten global recovery

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US stocks cratered on Monday as investors eyed a spike in global COVID-19 cases led by the Delta variant, throwing up a roadblock to a full recovery of the economy.

The Dow Jones industrial average fell 726 points, or about 2.1%, for its worst day since October 2020, while the benchmark S&P 500 and tech-heavy Nasdaq Composite also tumbled.

The yield on the 10-year Treasury note declined as much as 12.2 basis points to 1.177%, its lowest level since February as investors flocked to safe-haven assets.

Here’s where US indexes stood at the 4:00 p.m. ET close on Monday:

Read more: ‘More weakening beneath the surface’: A Wall Street strategist who warned investors before last year’s 35% crash lays out the latest signs that another slump into a bear market is looming

“COVID has returned to the front burner of investor concerns right now,” David Donabedian, CIO of CIBC Private Wealth, said in a note. “Last week we had high inflation readings. Now we have concerns that the rise in COVID cases is dimming the economic outlook. While the second-quarter earnings reports have so far beat expectations, this is old news now.”

Shares of airlines, cruise operators, and other travel companies slumped on concerns that the Delta variant would derail the recovery.

American Airlines and airplane maker Boeing all slipped roughly 5% each. Expedia Group and hotel chain Marriott both declined by roughly 3% each. Meanwhile, Carnival, Norwegian Cruise Line Holdings, and Royal Caribbean Cruises all fell as well.

Energy stocks tumbled, including Texas-based oil equipment maker NOV and Diamondback Energy.

Some argue the plunge on Monday is nothing to fear. The sell-off in stocks is a “healthy pullback” that will likely be short-lived and could present a buying opportunity, said technical analyst Katie Stockton of Fairlead Strategies.

In cryptocurrencies, bitcoin continued its recent slide, falling as much as 3.4% to $30,646.90. All other major cryptocurrencies – ether, cardano, ripple, dogecoin, polkadot, and solana – traded lower on Monday.

Despite the downturn, mining bitcoin has been a lot easier. The asset’s “network difficulty,” which measures how much computing power is needed to mint a new bitcoin, has plummeted.

Oil fell on news over the weekend that OPEC+ reached a deal on supply, overcoming the deadlock between Saudi Arabia and the UAE.

West Texas Intermediate crude fell as much as 8.06%, to $66.02 per barrel. Brent crude, oil’s international benchmark, dropped 7.39%, to $68.15 per barrel, at intraday lows.

Gold fell as much as 0.45%, to $1,807.56 per ounce.

Lumber gained modestly, rising 4.83% to $561.90 as supply catches up with demand. Prices are set to stay elevated despite recent declines, according to an economist,

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Dow soars 452 points as recovery hopes grow amid accelerated vaccine rollout

wall street new york stock exchange
Traders work on the floor of the New York Stock Exchange on March 11, 2020 in New York.

  • US stocks closed higher on Friday buoyed by optimism over the pace of vaccinations.
  • Risk appetite returned as a heightened pace of the vaccine rollout promised by President Joe Biden suggested the economy was headed for a reopening.
  • Oil prices edged higher following news that it could take weeks to dislodged the container ship blocking the Suez Canal.
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The Dow Jones industrial average led US stock higher Friday as optimism around the economic recovery was boosted on the back of an accelerated pace of COVID-19 vaccinations. The Dow closed higher by over 450 points.

Thus far, 25.7%, or 85 million Americans have received at least one dose of the vaccine and 14% or 46.3 million have received two doses. President Joe Biden pledged this week to double his administration’s original goal to 200 vaccine doses in by his 100th day in office.

Energy producers and health care companies outperformed their peers on the last trading day of the week. Bank shares also rose after the Federal Reserve Thursday afternoon announced that banks can raise dividends and resume share repurchases after June 30.

Here’s where US indexes stood at the 4 p.m. ET close on Friday:

BowX Acquisition Corp on Friday announced it will merge with WeWork in a deal that values the co-working company at $9 billion.

Cathie Wood’s ARK Autonomous Technology & Robotics ETF recently bought 800,494 shares in Jaws Spitfire Acquisition Corp, a SPAC backed by tennis champion Serena Williams. Among the fund’s biggest holdings are Tesla,, Baidu, and Alphabet.

Root jumped as high as 20% as Citron’s Andrew Left published a report saying the highly-shorted auto-insurance company is “a misunderstood short.”

Financial technology firm SoFi announced that it will be allowing its users to directly invest into initial public offerings, an opportunity usually reserved for institutional investors. SoFi’s announcement comes a day after Robinhood said it is looking to allow its users to also buy directly into IPOs, including its own upcoming public debut.

UBS Wealth Management said bitcoin’s “limited real-world use” and “extreme volatility” illustrate the cryptocurrency’s recent surge is still a speculative bubble. In a note on Friday, UBS said it remains “unconvinced” by bitcoin.

In the UK, cryptocurrency firms DMG Blockchain Solutions and Argo Blockchain are launching Terra Pool, the world’s first bitcoin mining pool powered by clean energy in an attempt to better manage the impact of bitcoin mining on the climate.

Oil prices edged higher, bouncing back from Thursday’s slide, on news that it could take weeks for experts to dislodge the massive 220,000-ton container ship blocking the Suez Canal for around four days now.

West Texas Intermediate crude climbed as much as 2.31%, to $60.87 per barrel. Brent crude, oil’s international benchmark, also rose by 4.02%, to $64.44 per barrel.

Gold slipped 0.13% to $1,732.43 per ounce.

Bitcoin edged higher by 3.57% to $53,653 staying above the $53,000-level most of Friday. Traders braced themselves ahead of the record $6 billion bitcoin options that expired today.

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Tech stocks’ market leadership may be over and investors aren’t ‘bullish enough about the reopening’, says Fundstrat’s Tom Lee

Tom Lee
Thomas Lee Managing Director and Head of Research at Fundstrat

  • Fundstrat’s Tom Lee says tech stock’s market leadership is fading as energy, financials, and cyclicals takeover.
  • The Head of Research at Fundstrat argued investors aren’t “bullish enough about the reopening.”
  • Lee sees the reopening of the US economy post-pandemic as akin to a “post-war reconstruction period with government stimulus.”
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Tech stocks’ market leadership may be fading and investors aren’t “bullish enough about the reopening,” according to Fundstrat’s Tom Lee.

Lee made an appearance on CNBC’s “Fast Money” on Wednesday. In the interview, he said he sees tech stocks’ market leadership fading as the post-pandemic reopening gets underway.

“I think tech’s leadership, which was so astounding for the past decade, I think we’re seeing a new leadership emerge,” Lee said.

The managing partner and head of research at Fundstrat Global Advisors argued energy, financials, and cyclicals are leading the way now. And according to Lee, that means “a vigorous economic recovery is underway.”

Lee argued that the leadership of cyclicals will hurt tech and growth focused stocks going forward as well.

“These cyclicals could turn into growth stocks which means traditional growth stocks aren’t as shiny and interesting,” he said.

Lee also expects a faster reopening than other observers, arguing “people aren’t bullish enough about the reopening,” although he noted that “nobody can say COVID has been vanquished.”

Lee said although his reopening bullishness might be looked at as a “contrarian view” he sees the current era as a type of “post-war reconstruction period with government stimulus.”

He added that is “extremely boomy for real investment spending which is the biggest multiplier to GDP.”

Lee isn’t alone in the crowded reopening trade, but his somewhat bearish view on tech stocks is a shift from the norm. Lee has been a fan of tech stocks, and in particular Big Tech, for some time.

The head of research at Fundstrat even called big tech companies “unkillable businesses” in an interview in June of last year. For now though, Lee recommends avoiding the names.

His view isn’t shared by all, though. 

Analyst Dan Ives from Wedbush Securities said in a note to clients on Wednesday that he believes “tech stocks have another 25%+ upward move in the cards over the coming year led by FAANG, cloud, and cybersecurity names despite this risk-off moment on the Street.”

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AMC extends 2-day rally to 36% with NYC movie theaters set for partial reopening in March

AMC kiosks

Shares of AMC Entertainment extend their two-day rally to 36% after New York Governor Andrew Cuomo announced Monday that New York City movie theaters are set for partial reopening on March 5.

Cuomo said theaters are only allowed to operate at 25% capacity, or up to 50 people, per show. The governor also noted that assigned seating, social distancing, and other health precautions would be in place.

“We are excited to announce that AMC, the largest movie theatre exhibitor in New York City, will reopen all 13 of our theatres in New York City beginning March 5,” said Adam Aron, CEO of AMC, in a statement

Aron noted that since reopening their theaters in August 2020, they have welcomed nearly 10 million moviegoers “without a single reported case of COVID-19 transmission.” 

Theaters in New York City have been shut for nearly a year in a bid to curb the spread of the virus. Movie theaters in the state, meanwhile, have been open for some time at limited capacity, as well as in other parts of the country. 

The recent move to welcome back moviegoers comes amidst the governor’s effort in repoening certain parts of the state to revive the economy from opening the doors of Barclays Center to Madison Square Garden.

Not everyone, though, is pleased. An employee at Madison Square told Insider that she was shocked by the swiftness of the governor’s announcement and argued that she would need a couple more weeks for her vaccine to fully take effect.

AMC, the world’s biggest movie-theater company, has seen its stock price skyrocket and plummet in the past weeks as Reddit traders targeted the company, along with GameStop, by buying large volumes in an attempt to squeeze hedge funds shorting these. 

Apart from that, investors have reallocated their portfolio into so-called reopening sectors from travel to leisure and entertainment since signs of success from various COVID-19 vaccines began to appear.

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AMC rips 8% higher as Reddit traders stick to their favorite meme stocks

amc movie theater nyc covid19
  • AMC gained as much as 8% on Tuesday as Reddit traders piled into the theater chain’s shares.
  • While the day-trading phenomenon died out earlier this month, Tuesday’s climb suggests the crowd still holds some sway in the market.
  • Reopenings and vaccination could lift AMC from its COVID-19 slump, one Reddit user said.
  • Watch AMC trade live here.

AMC Entertainment surged as much as 8% on Tuesday as retail investors banding together in online forums returned to the struggling theater chain.

The world’s biggest movie-theater company saw its stock price skyrocket in late January as traders in Reddit groups including r/wallstreetbets piled into highly shorted stocks. Shares soared as high as $20.36 on January 27 before plunging back to earth as the day-trader phenomenon fizzled out.

Tuesday’s price action suggests the crowd of casual investors is still somewhat in it. The gains placed shares at their highest in about a week. Posts on Wall Street Bets hailed AMC as a top recovery play and praised the company’s recent stock sales as a key lifeline. Vaccinations and economic reopening could revive AMC from its virus-induced downturn, Reddit user u/ImFedUpWithItAll said in a post detailing his bullish thesis.

“I’m not Buffett so I’m not buying for life. I’m in this for the rally to normalcy,” they added.

AMC was the most heavily traded company on the New York Stock Exchange before the market opened. Other stocks featured on Wall Street Bets fared worse. Investors looking to lift Palantir saw shares tumble in early trading. GameStop – the group’s favorite stock during the January rally – rose slightly.

Read more: GOLDMAN SACHS: These 40 heavily shorted stocks could be the next GameStop if retail traders target them – and the group has already nearly doubled over the past 3 months

The theater chain was among the few companies able to convert extraordinary retail-trader demand into a stronger balance sheet. The company raised more than $300 million last month by selling shares during the Reddit-trader rally. When coupled with a $411 million credit line, the fundraising efforts took bankruptcy talks “completely off the table,” CEO Adam Aron said in a statement.

To be sure, locations in key markets including California and New York remain closed as COVID-19 cases rise across the country. The halt to regular operations endangered the company earlier in the pandemic and forced warnings of extinguished cash reserves.

Daily COVID-19 case counts have since fallen, prompting investors to shift back into so-called reopening sectors including travel, leisure, and entertainment.

AMC closed at $5.59 on Friday, up roughly 158% year-to-date. The company has three “buy” ratings, 10 “hold” ratings, and four “sell” ratings from analysts, with a median price target of $3.99.

Read more: UBS says bitcoin is a bubble and too volatile to diversify a portfolio, unlike gold – here’s why the bank says it could end up ‘worthless’

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