On Thursday U.S. stock futures opened higher, one day after the Dow, S&P 500 and Nasdaq saw steep declines of more than 2% as concern deepened about heightened speculative trading activity around soaring short-squeezed GameStop (GME). Nasdaq futures had been lower earlier Thursday on weakness in Apple (AAPL) and Tesla (TSLA) after earnings.
GameStop shares soared yet again to as high as around $500 in Thursday’s premarket, before going negative like they did overnight. The moves followed a more than 130% rally on Wednesday in heavy volume, pushing its week-to-date gains to 466%. The stock was worth about $40 just a week ago. It was worth around $6 a few months ago.
The government just released two key economic reports: Gross domestic product and weekly jobless claims. Fourth-quarter GDP advanced 4%, a bit below estimates. Initial jobless claims for the week ending Jan. 23 totaled a still-elevated Covid level of 847,000 but fewer than expected.
Major airlines reported quarterly results before the opening bell, with shares of heavily shorted American soaring about 50% at one stage, before cutting those gains in half. That action came despite the carrier posting a record fourth-quarter loss and facing difficult months ahead as new travel restrictions and a slow rollout of vaccines cloud hopes for a near-term recovery.
Some market pros see the frenzied short squeezes in GameStop and other shorted stocks as signs of a bubble brewing, but the Federal Reserve doesn’t seem to. For that reason, investors expect asset prices could continue to rise.
Dow stock McDonald’s fourth-quarter earnings and revenue fell short of estimates. But the fast-food chain said U.S. same-store sales jumped to 5.5%, crediting marketing investments and promotional activity during the pandemic. Shares were modestly higher.
Shares of Apple, Tesla and Facebook were mixed, the morning after the tech giants reported quarterly results. In the case of Apple, whose stock soared more than 80% in the past 12 month, shares moving lower might be taking a breather despite the company’s most profitable quarter ever.
Facebook beat estimates with quarterly earnings and revenue. The stock turned higher. The company also said Apple’s planned privacy changes may make it more difficult for Facebook to target users with ads. Facebook shares were up 26% in the past year as of Wednesday’s close.
Tesla’s quarterly earnings missed estimates, though revenue exceeded expectations. The high-flying stock, up over 670% in the past 12 months, was under pressure after the company did not provide a clear vehicle delivery target for 2021.