Stock futures traded slightly lower Thursday evening, steadying after a recovery rally during the regular session.
Contracts on the Dow fell about 50 points, or 0.2%, shortly after the overnight session began on Thursday. The index had closed higher by 1%, or 300 points, earlier in the day, led by shares of Disney (DIS) and Intel (INTC).
Shares of some of the heavily shorted stocks that had become popular picks among members of Reddit’s r/wallstreetbets forum surged anew in late trading after sliding during the regular session and giving back steep gains from earlier this week. GameStop (GME) shares nearly halved during regular trading on Thursday before rocketing higher by more than 50% in the after-hours session. Shares of AMC (AMC) also soared in late trading after a regular-session slide, as did shares of BlackBerry (BB), Express (EXPR), Bed Bath & Beyond (BBBY) and Nokia (NOK).
During Thursday’s session, online brokerages including Robinhood, Webull Financial and E-Trade Financial blocked buying of many of these recently volatile shares, drawing the ire of users, criticism from lawmakers and a class action lawsuit against Robinhood for the trading restrictions.
Elsewhere, recent prints on the U.S. economy came in better than expected, pointing to a tentative improvement in the economic landscape as investors await widespread vaccinations and a lasting economic reopening. Weekly unemployment claims dipped below 900,000 for the first time in three weeks, albeit while remaining at a historically elevated level.
“I think what we’re looking at is, we’ve got pockets around the market that are decidedly showing signs of bubble-ness so to speak, whether that comes from what we saw [Wednesday], which was really a side-show of the markets, related to these shorted stocks that were driven up higher by individual investors,” John Stoltzfus, Oppenheimer chief markets strategist, told Yahoo Finance on Thursday. “The other side of it would be on a fundamental basis, what we are seeing is an economy that is positioning itself for a recovery process. And that means your core equities are likely to have an opportunity to move higher.”
“The valuation might be stretched in terms of a more conventional period, but right now with the Fed essentially magnanimously providing liquidity and fiscal policy coming to the rescue at least one more time to help small businesses and individuals, we would say that valuations are probably reflecting the current environment, and a need for investors who have intermediate to long term goals to invest in stories that are fundamentally sound,” Stoltzfus added.
6:24 p.m. ET Thursday: Stock futures open lower
Here were the main moves in markets, as of 6:24 p.m. ET Wednesday
S&P 500 futures (ES=F): 3,770.25, down 9 points or 0.24%
Dow futures (YM=F): 30,474.00, down 33 points or 0.11%
Nasdaq futures (NQ=F): 13,171.75, down 14.25 points or 0.11%
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.
Find live stock market quotes and the latest business and finance news
For tutorials and information on investing and trading stocks, check out Cashay
Source: Read Full Article