Stocks gave up their early gains in mid-morning trading Wednesday, as investors turn their focus to some strong earnings reports from Big Tech companies and hopes for getting more economic stimulus passed in Washington.
Investors also continue to watch shares of beaten-down companies such as GameStop and AMC Entertainment, which have been the target of a community of online investors. Both stocks were up modestly in early trading, after plunging sharply the last two days.
The S&P 500 was down 0.2% as of 10:40 a.m. Eastern. The Dow Jones Industrial Average was down 0.5% and the Nasdaq Composite, which is weighed by big technology companies, was was down 0.2%.
Google’s parent company, Alphabet, jumped more than 7% after reporting a blowout quarter as its digital advertising machine regained momentum.
It’s a technology-heavy week for earnings. After the closing bell, investors will get results from technology giant Cisco Systems as well as payments behemoth PayPal.
Meanwhile shares of Amazon were down less than 1% despite the company reporting a huge rise in quarterly profits as well as the news that its founder and CEO Jeff Bezos would be stepping down as CEO to focus on broader work at the company.
With Democrats and Republicans remaining far apart on support for President Joe Biden’s $1.9 trillion stimulus package, investors are betting that the administration will opt for a reconciliation process to get the legislation through Congress.
Shares in GameStop and other recent high-flying stocks hyped by online traders were up modestly, with GameStop up 1% and AMC up 5%. The stocks have been caught up in a speculative frenzy by traders in online forums and on social media who seek to inflict damage on Wall Street hedge funds that have bet these stocks would fall.
GameStop plunged 60% to $90 a share on Tuesday, and AMC Entertainment lost 41.2% to $7.82 a share. Both companies have been in the spotlight for more than two weeks as the online community of investors pushed the stocks to astronomical levels.
GameStop, whose shares have traded mostly on investor opinion instead of actual company news, announced it was hiring a new chief technology officer which could be a reason for some investors to be buying shares Wednesday.
Investors also had some economic reports to work through. A gauge of the service sector, where most Americans work, came in at its highest level in almost two years last month. The measure published by the Institute for Supply Management climbed to 58.7% in January, up a full percentage point from the previous month.
Meanwhile a report on private sector hiring by payroll data company ADP showed employers hired 174,000 workers in January, which was much better than economists expected.
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