Stocks Drop, With Tech Earnings in Focus
January 27 2021 - 10:32AM
Dow Jones News
By Will Horner
U.S. stocks fell amid concerns about Covid-19 vaccine
distribution and as investors parsed a bumper day of earnings
reports.
The Dow Jones Industrial Average fell 523 points, or 1.7%, to
30896, and the S&P 500 fell 1.9%. The Nasdaq Composite lost
2.1%.
Delays in the rollout of Covid-19 vaccines, coupled with
lingering lockdown measures, marked a "double whammy" of bad news
for investors, said Hani Redha, a portfolio manager at PineBridge
Investments.
"I think the market expected that by now we would be talking
about loosening, not tightening restrictions," he said. "On the
vaccine rollout, this is very problematic for the near term. It is
very critical for shaping the growth bounce back, and these issues
are just adding more delay to that."
AstraZeneca rebutted reports Wednesday that it had pulled out of
a meeting with European Union officials, as a spat between the two
groups regarding a vaccine shortfall deepened.
The Biden administration said Tuesday it would purchase enough
additional coronavirus shots to vaccinate most of the U.S. with a
two-dose regimen by the end of summer.
On Wednesday, investors parsed results from AT&T, Blackstone
and Boeing, with earnings from Apple, Facebook and Tesla due just
after the market closes. Investors are eager to see how the tech
giants fared during a quarter marked by continued lockdowns and
stay-at-home orders.
"The bar for tech stocks to beat is quite high because we were
still in lockdown and yet they do seem to be doing well relative to
those higher expectations," said Mr. Redha.
Shares of Microsoft gained 0.3% after the company reported
record quarterly sales Tuesday. Its shares closed at a new high
Tuesday.
Walgreens Boots Alliance was up 9.4% after the drugstore chain
named Starbucks operating chief Rosalind Brewer as its next chief
executive.
Earnings have pleased the market so far and investors continue
to bet on economic support from the Federal Reserve and a possible
stimulus plan from the Biden administration. On Tuesday, the
S&P 500 hit a new intraday high before slipping in the final
minutes of trading.
"The Fed and the new Biden stimulus plans -- it's all a very
positive backdrop for the equity market," said Brian Walsh, Jr., a
portfolio manager at Walsh & Nicholson Financial Group. "They
are saying we aren't going to let the markets fail right now and,
with bond yields as low as they are, there is nowhere else to
be."
The Fed is expected to leave monetary policy unchanged and
Chairman Jerome Powell will likely underscore the bank's commitment
to supporting the economy with low interest rates and bond buying
for the foreseeable future. Mr. Powell will likely face questions
about the health of the economy and how long the Fed's stimulus
measures will remain in place.
GameStop surged 106% as day traders, propelled by social media,
looked ready to pile into the retailer for another day. The stock
rose 113% Tuesday amid a battle between individual investors and
hedge funds who are shorting the stock. After markets closed
Tuesday, Tesla Chief Executive Elon Musk tweeted "Gamestonk!!" in
an apparent reference to the frenzied trading.
In commodities markets, U.S. crude fell 0.7% to $52.23 a barrel.
Gold prices fell 0.9% to $1,834.10.
Overseas, the pan-continental Stoxx Europe 600 was down 1.7%,
while in Asia, stock indexes were mixed. Japan's Nikkei 225 rose
0.3%, Hong Kong's Hang Seng fell 0.3%, while in mainland China, the
Shanghai Composite edged up 0.1%.
Write to Will Horner at William.Horner@wsj.com
(END) Dow Jones Newswires
January 27, 2021 10:17 ET (15:17 GMT)
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