GameStop Soars Again After 44% Plunge... New York Stock Market Finds Stability

[Asia Economy New York=Correspondent Baek Jong-min] The major indices of the New York stock market rebounded successfully after a sharp decline in one day. Although the US economic growth rate fell short of expectations, stocks favored by individual investors such as Gamestop, which had shaken the entire market, declined, showing signs of stabilization.

[Image source=AP Yonhap News]

On the 28th (local time), the Dow Jones Industrial Average rose 300.19 points (0.99%) from the previous session to close at 36,603.36, the S&P 500 index increased by 36.61 points (0.98%) to 3,787.38, and the Nasdaq index rose 66.56 points (0.50%) to finish at 13,337.16.

The market also significantly eased fears of further declines. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as the fear index, plunged 21.82% from the previous trading day to 29.09. On the previous day, rumors that hedge funds, which suffered large losses from short selling, were selling other stocks in large quantities were interpreted as the background for the market decline.

Although the stock market closed higher that day, the narrowing gains toward the end of the session make it difficult to be optimistic about the future market trend. The S&P 500 index rose as much as 2.13% during the session but closed with less than a 1% gain.

Large technology stocks that announced earnings the day before were all weak. Apple plunged 3.5%. Facebook also fell 2.6% after its earnings announcement. Electric vehicle maker Tesla dropped 3.32% as its fourth-quarter sales fell short of expectations. Microsoft showed a contrasting performance, rising 2.59%.

When Robinhood, a stock trading app mainly used by individuals, restricted trading on the stocks that surged, those stocks fluctuated greatly. The leading stock Gamestop repeatedly experienced dizzying ups and downs and closed down 44%.

However, Gamestop still shows high volatility, rising again by 35% in after-hours trading.

Theater chain AMC, which had surged 300% the day before, fell 56%, and retailer Bed Bath & Beyond dropped 36%. Blackberry and Nokia also fell by 41% and 29%, respectively.

American Airlines, which attracted buying demand from individuals looking for heavily shorted stocks, showed an intraday rise of over 50% but ended trading with a 9% increase.

Although the US economic growth rate for the fourth quarter of last year fell short of expectations, it did not have a significant impact on the market. The US fourth-quarter economic growth rate was 4.0%, below the Dow Jones compiled market forecast of a 4.3% increase.