Dow drops over 300 points, Boeing hit after record loss

GameStop stock surge a sign of a bubble?

Mainstay Capital Management CEO David Kudla on GameStop shares and the high demand for tech company stocks.

U.S. equity markets were under pressure Wednesday morning as investors digested an onslaught of earnings reports ahead of the Federal Reserve's first interest rate decision of the year.

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TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES30360.39-576.65-1.86%
SP500S&P 5003770.76-78.86-2.05%
I:COMPNASDAQ COMPOSITE INDEX13336.296468-289.77-2.13%
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The Dow Jones Industrial Average fell by 357 points, or 1.16%, while the S&P 500 and the Nasdaq Composite were down 1.26% and 1.38%, respectively.

Looking at stocks, Dow component Boeing Co. lost a record $11.9 billion in 2020 as the company’s bottom line suffered due to the pandemic and the grounding of the 737 Max jet. The planemaker said the debut of its 777X jet would be delayed again until late 2023.

TickerSecurityLastChangeChange %
BABOEING COMPANY193.30-8.61-4.26%
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Elsewhere in the Dow, Microsoft Corp.'s quarterly profit rose more than 30% year over year as the COVID-19 pandemic drove demand for its cloud-based products and video games. Both earnings and revenue were ahead of Wall Street estimates.

TickerSecurityLastChangeChange %
MSFTMICROSOFT CORP.232.38+0.05+0.02%
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Apple Inc., Facebook Inc. and Tesla Inc. are among the companies set to report their quarterly results following the closing bell.

TickerSecurityLastChangeChange %
AAPLAPPLE INC.142.21-0.95-0.66%
TSLATESLA INC.872.02-11.07-1.25%
FBFACEBOOK INC.274.50-7.55-2.68%
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In deals, Allstate Corp. reached a deal to sell its life insurance unit to private equity firm Blackstone for $2.8 billion.

TickerSecurityLastChangeChange %
ALLTHE ALLSTATE CORPORATION112.40+2.86+2.61%
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Meanwhile, the short-squeeze that has boosted GameStop Corp. shares by 642% since Jan. 12 persisted on Wednesday with shares more than doubling early in the session. Hedge fund Melvin Capital, which received a $2.75 billion infusion from other funds, covered its losing position on Tuesday afternoon, fund manager Gabe Plotkin told CNBC.

TickerSecurityLastChangeChange %
GMEGAMESTOP CORP317.06+170.19+115.87%
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Shares of BlackBerry Ltd. and Bed Bath & Beyond Inc., two other companies also seeing short-squeezes, remain in focus.

TickerSecurityLastChangeChange %
BBBLACKBERRY LIMITED22.17+3.29+17.43%
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The Federal Reserve will on Wednesday afternoon is expected to keep policy on hold following its first meeting during the Biden administration. Traders will be parsing the Fed’s statement for clues to how the central bank could alter its asset-purchase program in the months ahead.

In commodities, West Texas Intermediate crude oil slipped 13 cents to $52.48 per barrel and gold fell $11.50 to $1,839.40 an ounce.

European markets were trading sharply lower across the board with Germany’s DAX 30 pacing the decline, down 2.43%, while France’s CAC 40 and Britain’s FTSE 100 were weaker by 2.04% and 1.83%, respectively.

In Asia, Hong Kong’s Hang Seng index slid 0.32%, China’s Shanghai Composite edged up 0.11% and Japan’s Nikkei 225 advanced 0.31%.

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