US shares end worst week since October; Dow down over 600 points

The US benchmark equity indices closed Friday’s trade on a negative note after a rally in select stocks such as GameStop triggered volatility. 

While the S&P 500 ended down 1.9 per cent at 3,714.24, the Dow Jones Industrial Average closed lower at 620.74 points, or 2 per cent, to 29,982.62. NASDAQ Composite fell 2 per cent to 13,070.69.

In January, GameStop shares jumped over 1,600 per cent, while AMC Entertainment surged more than 500 per cent. 

The investors are concerned that further volatility amid massive trading in select stocks may negatively impact the financial markets going ahead since hedge funds betting against the stock may be forced to sell other securities to raise cash.  The Cboe Volatility Index, or VIX, climbed above 33 on Friday.

Worst month since October

The three equity indices slipped over 3 per cent in the week, the worst loss since October last year. In January, Dow Jones and the S&P 500 lost 2 per cent and 1.1 per cent, respectively, facing their first negative month since October. However, the tech-heavy NASDAQ Composite advanced 1.4 on the month.

COVID-19 vaccine concerns

There were also some concerns around new trial results from the coronavirus vaccine by Johnson & Johnson, which showed less than convincing results on some variants. The one-dose vaccine showed 66 per cent overall effectiveness in protecting against the deadly virus.

Global markets

While Europe’s benchmark Stoxx 600 index ended down 1.9 percent, London’s FTSE 100 benchmark dipped 1.8 percent. Japan’s Topix declined 1.6 percent, South Korea’s Kospi fell 3 percent, and Hong Kong’s Hang Seng closed 0.9 percent lower.

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