Wall Street bends under the pressure
The Associated Press
January 30, 2021 10:53 am
[Source: The Associated Press]
Another bout of selling gripped the U.S. stock market Friday, as anxiety mounts over whether the frenzy behind a swift, meteoric rise in GameStop and a handful of other stocks will damage Wall Street overall.
The S&P 500 dropped 1.9%, giving the benchmark index its biggest weekly loss since October.
The Dow Jones Industrial Average and Nasdaq each fell 2%.
GameStop shot up nearly 70%, clawing back much of its steep loss from the day before after Robinhood said it will allow customers to start buying some of the stock again.
GameStop has been on a stupefying 1,600% run over the last three weeks and has become the battleground where swarms of smaller investors see themselves making an epic stand against the 1%.
The assault is directed squarely at hedge funds and other Wall Street titans that had bet the struggling video game retailer’s stock would fall.
Those firms are taking sharp losses, and other investors say that’s pushing them to sell other stocks they own to raise cash. That, in turn, helps pull down parts of the market completely unrelated to the revolt underway by the cadre of smaller and novice investors.
The maniacal moves for GameStop and a few other formerly beaten-down stocks has drowned out many of the other issues weighing on markets, including the virus, vaccine rollouts and potential aid for the economy.