U.S. stocks jumped on Thursday, roaring back from a sharp selloff on Wall Street that saw the S&P 500 and the Dow Jones Industrial Average suffer their worst drop in three months.
The Dow Jones Industrials leaped 587.55 points, or 1.9%, to reach Thursday noon EST at 30,809.72, and resume their comeback from the index’s worst day since Oct. 28.
The S&P 500 moved forward 74.57 points, or 2%, to 3,825.25, boosted by Disney and American Express. All 11 S&P 500 traded in the green amid the broad market rally. Cyclical sectors financials and materials, those most sensitive to an economic recovery, jumped 2% each. Tech and communication service also led the strong gains.
The NASDAQ jumped 199.01 points, or 1.5%, to 13,470.02.
Brick-and-mortar video game retailer GameStop and AMC Entertainment dropped sharply Thursday after brokerage firms Interactive Brokers and Robinhood took steps to restrict transactions in the heavily shorted names.
GameStop, a red-hot target on the WallStreetBets Reddit chat room, fell more than 30% amid multiple trading halts, cutting its massive week-to-date gains of 300%. AMC Entertainment fell 50% after soaring a whopping 300% in the previous session. Bed Bath & Beyond slid 25%.
Shares of GameStop has soared more than 1,300% in January alone as newbie day traders keep pushing each other to pile into the shares and call options, creating massive short squeezes in the name. The stock is still the most shorted name in the market with 120% of its float shares sold short.
Shares of American Airlines surged more than 8% after the carrier posted better-than-feared quarterly results. Short covering also contributed to the gains as hedge funds and other short sellers rushed to buy shares to cut their losses. American Airlines is the most-shorted U.S. airline.
Apple turned in its largest revenue on record at $111.4 billion in its fiscal first-quarter earnings report for fiscal 2021. Sales for every product category rose by double-digit percentage points. Shares of the tech giant, however, dipped nearly 2%.
Tesla dropped about 3% after the electric car maker posted worse-than-expected earnings for the latest quarter. The company also said it expects annual average delivery growth of 50% going forward.
On the data front, gross domestic product increased at a 4.0% pace in the fourth quarter, slightly below the 4.3% expectation from economists surveyed by Dow Jones.
The number of first-time filers for unemployment benefits rose less than expected last week. Jobless claims totaled 847,000 for the week ended Jan. 23, the U.S. Labor Department reported Thursday. Economists polled by Dow Jones had expected first-time claims to total 875,000.
Prices for 10-Year Treasurys dropped, raising yields to 1.06% from Wednesday’s 1.02%. Treasury prices and yields move in opposite directions.
Oil prices lost 37 cents to $52.48 U.S. a barrel.
Gold prices slid $4.70 to $1,840.20 U.S. an ounce.