Volatility hits Wall Street as stocks tumble across the board
It’s a volatile day on Wall Street, where stocks suddenly tumbled mid-morning. Investors have a lot on their minds: President Joe Biden’s stimulus plan is facing criticism from lawmakers concerned about the deficit, a deluge of corporate earnings is on tap and drug maker Merck pulled its Covid-19 vaccine plans.
Meanwhile, various trading platforms appear to be struggling with outages: Vanguard and Charles Schwab acknowledged on Twitter that some users are experiencing outages, while Downdetector also flagged issues for users of Robinhood, TD Ameritrade and E-Trade.
Stocks had started the session mixed but fell sharply mid-morning. The Dow tumbled more than 430 points at its low point.
The major three indexes have recovered since then, with the Dow down 0.4%, or 135 points, and the S&P 500 down 0.1% in the early afternoon.
The Nasdaq Composite has crept back into positive territory and is up 0.1%, putting the tech-heavy index is on track for a record finish.
“This risk off [dynamic] isn’t worrying me. It’s healthy,” Megan Horneman at Verdence Capital Advisors told CNN Business about the morning’s selloff. “I expect to see more days like this in [Biden’s] first 100 days,” as campaign promises get a reality check, she added.
The vaccine rollout, meanwhile, will likely be bumpy as well, with potential for negative headlines, Tom Martin, vice president and senior portfolio manager at Globalt.
JJ Kinahan, chief market strategist at TD Ameritrade, noted “there’s a lot of news to digest for investors. We’ve had such an incredible run, and 20% of the S&P 500 are releasing earrings this week.”
Big names including Apple, Facebook, Microsoft and Tesla are reporting earnings this week. So investors might be taking some money off the table ahead of the fourth-quarter results, which could explain some of the weakness in the market.
“I do think we’ve been in a euphoric state in the market for awhile, and now that the election settled and congress is in place, a lot of the good news has already been priced in,” Martin told CNN Business.
Volatility has also gripped certain single stocks: trading in gaming retailer GameStop has been halted multiple times throughout the morning as the company’s shares soared thanks to bullish investors touting the stock on Reddit.
