The US stock market reported simultaneous growth in all sectors – from technology to financial, during yesterday's trading session. The main stock indicators sharply rose and the increased enthusiasm in the most overheated areas of the market began to fade.
Moreover, all 11 sectors of the S&P 500 showed strong growth, with the financial, industrial as well as healthcare sectors leading the positive dynamics.
This optimism in the market can easily be explained by the inspiring corporate reports of large American companies published the day before. The second reason is resourceful investors who took the opportunity to buy shares cheaper after the most spectacular pullback since October last year.
The Dow Jones Industrial Average rose by 1.0%, namely to 30603.36 points, the S&P 500 also grew by 1.0%, reporting at 3787.38 points, and Nasdaq Composite by 0.5%, reaching 13337.16 points.
At the same time, the increased interest around GameStop and AMC Entertainment began to gradually subside. GameStop was the object of a struggle between intraday traders and hedge funds, which have large-scale short positions on the company's shares. Initially, the shares of the American retail chain GameStop fluctuated, and then plunged by more than 44%. AMC quotes also declined by 57%. It is noteworthy that Robinhood Markets and Interactive Brokers Group decided to restrict trading in GameStop, AMD and some other securities, which showed rapid growth the day before.
Investors remain focused on the corporate reporting of leading companies in the US, which seriously influences the market. Almost a third of the companies included in the S&P 500 managed to report the results of their activities and 81% of them exceeded experts' forecasts. Analysts believe that the S&P 500 index may approach 4,000 points before 2021 ends. This is 5.6% higher than the current level.
On Tuesday, many serious fluctuations during the trading session were associated with the quarterly financial reports.
American Airlines shares rose by 9.3%. There was also growth in the shares of many other representatives of the travel sector, with United Airlines and Carnival both increasing by 4%.
Comcast shares climbed by 6.6%. Apple shares plummeted by 3.5%. Tesla shares, which have shown consistent gains in recent months, are also down by 3.3%.
According to experts, the growth of stock markets in the near future will be restrained by delays in the vaccination program for the population of Europe and quarantine restrictions in other large states.
As for US domestic statistics, the number of unemployment claims in America has declined during the previous week, but remains high at 847,000. Meanwhile, the US GDP in the 4th quarter increased by 4% y/y, but did not meet analysts' expectations.
On Wednesday, the Fed decided to leave its policy unchanged, as it noted that business activity has declined amid rising coronavirus cases.
The yield on 10-year United States Treasury bonds declined below 1% for the first time since January 6, but later rose to 1.055%. The fall in government bond yields indicates that investors are avoiding risky assets and are concerned about the deterioration of the economic situation.
As for Asia-Pacific's stock markets, the decline prevails. In particular, Hong Kong's Hang Seng fell by 2.6%, China's Shanghai Composite by 1.9%, and Japan's Nikkei 225 by 1.5%.
