Here are the top news, trends, and analysis investors need to get their trading day started:
1. Futures show on Dow, Nasdaq falls after profit
Traders work on the trading floor of the New York Stock Exchange.
Dow futures fell 300 points on Wednesday. With earnings again a focus on Wall Street, Dow stocks Boeing and Apple publish their quarterly results before the open and after the close, respectively. Boeing shares lost 3.5% after disappointing numbers. The Nasdaq futures were also significantly lower. Microsoft bucked the downtrend, rising more than 1.5% in the pre-market after the tech giant reported better-than-expected earnings and sales late Tuesday.
The Dow, Nasdaq and S&P 500 closed slightly lower on Tuesday but stayed near recent record highs. The government reported Wednesday morning that durable goods orders rose less than an expected 0.2% in December. The Federal Reserve ends its two-day meeting in January on Wednesday afternoon. Investors are turning to Fed Chairman Jerome Powell for clarity on the prospect of “rejuvenating” or reducing asset purchases.
2. Melvin Capital closed the GameStop short position on Tuesday
A shopper walks to a GameStop store in Ottawa, Illinois on April 1, 2019.
Daniel Acker | Bloomberg | Getty Images
Melvin Capital closed its short position in GameStop on Tuesday afternoon after a huge loss, fund manager Gabe Plotkin told CNBC’s Andrew Ross Sorkin. The stationary video game retailer, the most hated stock of hedge funds, has been targeted by an army of retail investors who competed against short sellers in online chat rooms. GameStop shares have more than doubled this week alone, increasing their January earnings to 685%. The stock was worth only $ 6 four months ago. Shares in the pre-market fluctuated wildly, indicating a 50% gain to about $ 225 per share when it opened on Wednesday.
Street performers in Minnie Mouse costumes walk past an AMC movie theater in New York’s Times Square at night on October 15, 2020.
Amir Hamja | Bloomberg | Getty Images
Shares in contested cinema giant AMC Entertainment more than tripled during premarket trading on Wednesday, trading some of Wall Street’s worst-shortened stocks. Individual investors create short-term shortages by buying these names, while hedge funds, on the other hand, that are in short supply have to cover their losses. Individual investors promote their activities on the Wallstreetbets Reddit Board, which has 2.8 million members.
3. Boeing, Apple, Facebook and Tesla highlight the earnings reports
Boeing posted a record net loss of $ 11.9 billion in 2020. Results worsened when the company pushed back the debut of its 777X aircraft to late 2023. The warring aircraft manufacturer accepted a $ 6.5 billion charge in the fourth quarter. Boeing reported a loss of $ 15.25 per share for the fourth quarter. Sales of $ 15.3 billion exceeded expectations.
Prior to their earnings reports due to be released on Wednesday afternoon, tech giants Apple and Facebook saw their pre-market shares in the green, but Tesla shares in the red.
4. Microsoft beats earnings estimates as cloud and ad businesses accelerate
Satya Nadella, CEO of Microsoft, speaks during Microsoft’s annual general meeting on November 29, 2017 in Bellevue, Washington. / AFP PHOTO / Jason Redmond (Photo credit should be JASON REDMOND / AFP via Getty Images)
JASON REDMOND | AFP | Getty Images
Microsoft started Big Tech earnings, posting earnings of $ 2.03 per share and revenue of nearly $ 43.1 billion for the second quarter. The company’s Azure cloud computing unit had a particularly strong quarter, as did its advertising business on LinkedIn and On Search. Microsoft also issued rosy third-quarter revenue forecasts.
In the second quarter, Microsoft released consoles for Xbox Series X and $ 300 for $ 500, as well as a small version of its Surface Laptop PC called the Surface Laptop Go. The company also said that some of its source code was accessed after discovering malicious SolarWinds software in its environment.
5. Regular Covid briefings will continue as the US works to buy more vaccines
United States President Joe Biden holds up a face mask as he speaks about fighting the coronavirus disease (COVID-19) pandemic at the White House in Washington on January 26, 2021.
Kevin Lamarque | Reuters
President Joe Biden urges the country’s leading scientists and public health experts to keep Americans updated on the Covid pandemic that has killed more than 425,000 people in the United States. From Wednesday, administrative experts, including Dr. Anthony Fauci, hold briefings three times a week.
Biden said Tuesday the U.S. government was working to buy another 200 million doses of Covid vaccines, evenly split between Pfizer’s and Moderna’s shots. This could result in almost every American being fully vaccinated by fall. The Trump administration passed on purchases of additional doses of Pfizer and Moderna vaccines. The only two so far approved for emergency use in the US have instead tried to rely on additional vaccines that come out on the market.
– The Associated Press contributed to this report. Follow all developments on Wall Street in real time with CNBC Pro’s live market blog. Find out about the latest pandemics on our coronavirus blog.