Stock Market Today

Stock Market Today: Big Tech Leads Another Snap-Back Rally

COVID worries, including a not-glowing reception to Johnson & Johnson vaccine, helped drag the major indices lower Friday

Investors' necks are no doubt sore from the violent back-and-forth trading action these past few days, but at least Monday's charge was in the right direction.

A surge from several mega-cap tech and tech-adjacent stocks helped lift the major indices – Amazon.com (AMZN, +4.3%) and Google parent Alphabet (GOOGL, +3.6%) were up strongly ahead of their earnings reports, due out after Tuesday's close. (Here's what Wall Street is expecting out of them.)

The rousing market rebound came despite a report that President Joe Biden was meeting with a group of Republicans to discuss their coronavirus relief package – a mere $618 billion plan with smaller direct payments to fewer Americans and no state or local government aid.

The Dow Jones Industrial Average, led by Microsoft (MSFT, +3.3%), finished 0.8% higher to 30,211, while the S&P 500 (+1.6% to 3,773) and Nasdaq Composite (+2.6% to 13,403) enjoyed even stronger advances.

Other action in the stock market today:

  • The Russell 2000 roared ahead by 2.5% to 2,126.
  • Gold futures finished slightly higher again, improving 0.7% to $1,862.50 per ounce.
  • U.S. crude oil futures jumped 2.3% to settle at $53.42 per barrel.
  • Bitcoin prices, at $34,538 on Friday, cooled down by 2.0% to $33,849. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
  • Clubhouse Media Group (CMGR) – a Chinese healthcare company that renamed itself Clubhouse after buying West of Hudson Group, which is responsible for a number of content creation houses filled with young influencers – shot 57.8% higher on Monday. However, the over-the-counter stock's rally came after Tesla (TSLA) CEO Elon Musk's Sunday live talk on audio app Clubhouse, which is not related to Clubhouse Media, and which is not publicly traded. This led many, including Financial Times, to deduce the movement was at least in part due to confusion over their similar names.
stock chart for 020121

Editor's Note: While the chart shows a 2.5% gain for the Nasdaq Composite, the reported Nasdaq Composite index gain for Monday, Feb. 1, 2021, is 2.55%, which we round up to 2.6%.

'Short Busters' Find a New Shiny Object

The market's "short squeeze" saga also continued Monday. Momentum favorite GameStop (GME, -30.8%) lost more than a quarter of its value as traders followed a new manufactured wave into silver and silver exchange-traded funds (ETFs).

"Market participants have found and exposed weaknesses in hedge fund risk-management models surrounding the shorting of individual stocks, and engaged in a classic 'short squeeze' but with a new level of speed," says Mark Heppenstall, chief investment officer at Penn Mutual Asset Management. "This week begins with volatility moving into the metals market, with the price of silver seeing significant price changes."

Indeed, silver futures prices spike 8.0% on Monday to $29.06 per ounce.

Investors can still expect a great deal of volatility around the market's most shorted stocks, and most of these names should be considered hands-off unless you have extreme risk tolerance and money you can afford to lose completely. But a few stocks that Wall Street is betting against have budding bull cases and could be good for more than a quick swing trade.

While these 10 heavily shorted stocks still will require some stomach for turbulence, they remain worth a look for those who invest for the next few years, not just next week.

Kyle Woodley was long AMZN and Bitcoin as of this writing.

Most Popular

Are You Still Chasing the Almighty Dollar, Even Though You Have Plenty to Retire?
retirement

Are You Still Chasing the Almighty Dollar, Even Though You Have Plenty to Retire?

In our experience, many have saved enough money to retire comfortably. Yet too many worry about their money running out and want more. Maybe it’s tim…
May 6, 2021
Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs
Coronavirus and Your Money

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs

People have lots of questions about the new $3,000 or $3,600 child tax credit and the advance payments that the IRS will send to most families in 2021…
May 4, 2021
20 Dividend Stocks to Fund 20 Years of Retirement
dividend stocks

20 Dividend Stocks to Fund 20 Years of Retirement

Each of these high-quality dividend stocks yields roughly 4%, and you can expect them to grow their payouts even more. That's a powerful 1-2 combo for…
May 7, 2021

Recommended

Stock Market Today 7/23/20: Tech Stocks Take a Tumble
Markets

Stock Market Today 7/23/20: Tech Stocks Take a Tumble

An increase in weekly jobless benefits applications and profit-taking in tech stocks sent the major indices to steep declines Thursday.
July 24, 2020
Closing Bell 7/1/20: Nasdaq Hits New Highs to Start Q3
Markets

Closing Bell 7/1/20: Nasdaq Hits New Highs to Start Q3

The first day of 2020's second half kicked off with a mixed trading session that saw Amazon (AMZN) and Facebook (FB) help the Nasdaq to new highs.
July 2, 2020
Closing Bell 6/22/20: Big Tech Carries the Markets
stocks

Closing Bell 6/22/20: Big Tech Carries the Markets

Apple (AAPL) and Microsoft (MSFT) were at the forefront of a tech-led rally in the broader markets Monday.
June 22, 2020
Stock Market Today: Fed-Led Momentum Propels Dow Again
stocks

Stock Market Today: Fed-Led Momentum Propels Dow Again

Fed's bond backing, Powell's suggestion for more Congressional spending and hints at an infrastructure plan lifted stocks broadly Tuesday
June 16, 2020