The Dow has its biggest loss since October

By CNN Business

Updated 7:33 p.m. ET, January 27, 2021
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12:53 p.m. ET, January 27, 2021

TD Ameritrade puts restrictions on GameStop and AMC trading

From CNN Business' Paul R. La Monica

The insane surges in GameStop (GME) and AMC (AMC) shares have caused at least one top online broker to curtail trading in the two stocks on Wednesday.

TD Ameritrade, owned by Charles Schwab (SCHW), said in a statement that "in the interest of mitigating risk for our company and clients, we have put in place several restrictions on some transactions in Gamestop and AMC and other securities."

"We made these decisions out of an abundance of caution amid unprecedented market conditions and other factors," TD Ameritrade added.

GameStop more than doubled Wednesday and has soared nearly 720% in just the past five days. AMC skyrocketed more than 200% Wednesday.

Both stocks have been propelled by individual traders on Reddit's WSB board as well as customers of popular brokerage firm Robinhood. Each stock has been targeted by short sellers who believe the recent price surges are overdone.

But since short sellers have to borrow stock and sell it -- and eventually have to buy back the shares and return them -- the bullish comments and buy-by-the-day traders are causing big losses for hedge funds betting against GameStop and AMC. That has driven the stocks even higher, known as a short squeeze.

12:25 p.m. ET, January 27, 2021

Jobless claims and GDP on deck tomorrow

From CNN Business' Anneken Tappe

How about some escapism from this mad day? Let's talk about tomorrow.

The big economic releases are on deck: weekly jobless claims and the first look at fourth quarter GDP. Both reports are out at 8:30 am ET.

Weekly jobless claims haven't looked encouraging lately and tomorrow's report is unlikely to change that. Economists predict another 875,000 Americans filed for first-time unemployment benefits last week. That's would be a slight decline from the prior week's 900,000 but still far above the pre-pandemic level. The numbers do not include claims for the pandemic-specific government programs.

Continued jobless claims, which count workers who have applied for benefits at least two weeks in a row, are expected to stay flat at 5.1 million.

Meanwhile, we'll get the advance read of US gross domestic product, the broadest measure of economic activity, for the fourth quarter. Economists predict GDP grew at an annualized rate of 4%.

In a normal year, that would be something to celebrate -- an A+ for Trump's final economic report card. But 2020 was no normal year and the economy remains far from its pre-pandemic glory.

Read more about the GDP forecast here.

12:17 p.m. ET, January 27, 2021

Stocks are sharply down at midday

From CNN Business' Anneken Tappe

It's lunchtime in New York but if you're watching the market you might have lost your appetite as all three major indexes are sharply lower.

The Dow is down 1.5%, or some 450 points, while the broader S&P 500 is down nearly 2%. The Nasdaq Composite is down 1.8%.

A combination of profit-taking following stock rallies, investors awaiting corporate results in the busiest week of earnings season, and the Federal Reserve's monetary policy update this afternoon are all weighing on the market today. Oof.

But there are still some bright -- perhaps too bight -- spots in the market. GameStop (GME) and AMC (AMC) are still rallying, boosted by prolific Reddit users and retail investors who think Wall Street "experts" have got it all wrong.

11:14 a.m. ET, January 27, 2021

Bank of America throws cold water on 'spectacular' GameStop spike

From CNN Business' Anneken Tappe

GameStop (GME) is undoubtedly the stock of the week. The gaming retailer spiked Monday after retail investors chatting on Reddit talked the company up, forcing a massive squeeze among short sellers.

This week so far, GameStop is up more than 450%. And today alone, shares have risen more than 100%.

Is your head spinning yet?

Well, this momentum might not last, according to analysts at Bank of America (BAC).

GameStop has underperformed for years, they noted, adding that hopes for a turnaround will likely not be enough to really offset the structural pressures the company faces.

The pandemic has forced GameStop to shift more online, where 30% of its sales are now generated -- and which GameStop bulls see as a major opportunity. But Bank of America is still skeptical:

Very simply, the more business that shifts from in-store transactions, the more difficult it will be to sell high margin pre-owned and collectibles merchandise which accounted for 46% (estimate) of gross profit dollars in 2019," said BofA analysts in a note.

Bank of America's price target for GameStop is $10 ... and the company currently trades at more than $370 per share.

11:05 a.m. ET, January 27, 2021

Battle launched to oust ExxonMobil board members

From CNN Business' Matt Egan

For the first time in modern history, ExxonMobil is facing a battle to oust its board of directors.

Engine No. 1, a new activist investment firm, carried through on its threat to nominate four independent director candidates to Exxon's board. The fact that Exxon (XOM) faces a credible board fight underscores how disillusioned shareholders are about the iconic company's staggering decline.

Exxon needs a "clean break from a strategy and mindset that have led to years of value destruction and poorly positioned the company for the future," Activist No. 1 said in a statement.

In a statement, Exxon said it has been in talks with Engine No. 1 since mid-November and the company's board affairs committee will "evaluate" the investor's nominees.

Exxon promised to update investors in the coming weeks on its "strategy to build long-term, sustainable value for shareholders."

The struggling company is discussing adding one or more new directors to its board and stepping up sustainability investments, the Wall Street Journal reported, citing unnamed sources.

Engine No. 1 said a "reactive short-term approach is no substitute for a proactive long-term strategy that addresses the threats and opportunities facing the company in a changing world."

11:02 a.m. ET, January 27, 2021

The Dow is on track for its longest losing streak in 11 months

From CNN Business' Matt Egan

Traders work on the floor of the New York Stock Exchange on Tuesday, January 26.
Traders work on the floor of the New York Stock Exchange on Tuesday, January 26. Handout/Nicole Pereira/New York Stock Exchange/AP

The once-sizzling stock market is suddenly under fire.

The Dow tumbled as much as 584 points, or 1.9%, Wednesday morning before paring its losses a bit.

If the Dow finishes in the red Wednesday, it would be its longest losing streak since a seven-day nosedive in late February.

The big difference, of course, is in the magnitude of the losses.

During the current slump, the Dow is down a maximum of 2.7%. That's a drop in the bucket compared to last February, when the index plummeted nearly 4,000 points, or 13%, on surging coronavirus fears.

Yet despite the recent slide, the Dow is still within striking distance of its all-time highs.

10:04 a.m. ET, January 27, 2021

Trading platforms are having problems again

From CNN Business' Anneken Tappe

Is there a better time to have issues with your trading platform of choice than when the market is down more than 1%?

It looks like that's what's happening -- again.

Downdetector is flagging issues for users of Robinhood, Charles Schwab (SCHW), Fidelity (FNF) and ETrade. Several platforms also had problems on Monday, when the market briefly, but sharply, sold off.

9:56 a.m. ET, January 27, 2021

Dow tumbles more than 500 points

From CNN Business' Anneken Tappe

Less than 30 minutes into the trading day, it's looking ugly.

All three major indexes are sharply in the red and the Dow has shed more than 500 points.

It's too soon to tell if this is the correction market analysts have been warning we need, but note that those same strategists also believe periods of correction are healthy and not a reason to rethink all your investment decisions.

The Dow was down 1.7%, or 518 points.

The S&P 500 fell 1.9% and the Nasdaq Composite was down 2.1%.

9:46 a.m. ET, January 27, 2021

The oil industry is vowing to fight Biden's federal leasing freeze

From CNN Business' Matt Egan

Big Oil is gearing up for a fight over President Joe Biden's imminent freeze on new oil and gas leases on federal lands.

"We will do everything we can to fight this executive order," American Petroleum Institute CEO Mike Sommers told CNN Business.

In a bid to address the climate crisis, Biden is expected to order a moratorium on new leases on federal lands and water ways. The API, the oil and gas industry's most powerful lobbying group, relaunched an ad blitz this week that warns that a ban on federal leasing will hurt state funding of public schools.

"We will pursue every action at our disposal to push back, including legal options, if appropriate," Sommers said. "We're concerned about what this leads to next. We're raising the alarm."

The resistance shows how quickly tensions have ratcheted up between Biden and the oil industry. During his first day in office, Biden moved to rejoin the Paris Agreement on climate change, revoked a permit for the construction of the controversial Keystone XL Pipeline and placed a temporary moratorium on oil and gas leasing in the Arctic.