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Dow tanks 560 points, Nasdaq has worst single-day since October as yield rates rise

Last updated: 16:18 25 Feb 2021 EST, First published: 08:01 25 Feb 2021 EST

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4:10pm: Tech sector takes major hit

The Dow plunged 560 points, 1.8%, to 31,402 on Thursday. The Nasdaq gave away 479 points, 3.5%, to 13,119 in its worst single-day showing since October, and the S&P 500 declined 96 points, 2.5%, to 3,829. 

Apple Inc (NASDAQ:AAPL), Alphabet Inc (NASDAQ:GOOG), Facebook Inc (NASDAQ:FB) and Amazon.com Inc all lost more than 3%. 

The tech sector has been hit hard by rising yield rates. The 10-year Treasury yield topped 1.6% before simmering back down to 1.5%, its highest level since February 2020, according to CNBC.

12:05pm: GameStop's rally is back again

The Dow swooned nearly 300 points, 0.9%, to 31,655 at midday. The Nasdaq Composite dropped 281 points, 2.1%, and the S&P 500 declined 54 points, 1.4%, to 3,872.

"US tech stocks are once again at the forefront of the market selling, with recent moves from Jerome Powell to alleviate market jitters falling of deft ears," IG Senior Market Analyst Joshua Mahony wrote Thursday. "After a year that saw tech leave traditional companies in their wake, the past week has seen investors increasingly seek safety on from some of the stocks hardest hit by the pandemic."

Tesla Inc (NASDAQ:TSLA) was among the biggest laggards. The EV producer's share price slid more than 5% to $792.

Meanwhile, so-called meme stock GameStop Corp (NYSE:GME) is up another 56% today, reaching $143.41.

11.00am: Proactive North America headlines:

Blackrock Gold Corp (CVE:BRC) (OTCMKTS:BKRRF) (FRA:AHZ) names experienced finance industry executive as new SVP corporate development

The Valens Company (TSE:VLNS) (OTCQX:VLNCF) (FRA:7LV) FY2020 revenue surges 44% to $83.8M as market share increases in key Canadian provinces

Empower Clinics Inc (CSE:CBDT) (FRA:8EC) (OTCQB:EPWCF) unveils three new integrated health centre locations in Ontario with major revenue expectations

WeedMD Inc's (CVE:WMD) (OTCQX:WDDMF) (FRA:4WE) Starseed Medicinal releases strain-specific products for PAX ERA Vaporizer

American Manganese Inc (CVE:AMY) (OTCPINK:AMYZF) (FRA:2AM) welcomes President Biden's executive order directing the strengthening of critical supply chains including EV batteries

KULR Technology Group Inc (OTCQB:KULR) partners with the CSA Group to develop a new battery safety and testing procedure

Valeo Pharma Inc (CSE:VPH) (OTCQB:VPHIF) (FRA:VP2) boosts revenue by 76% in 4Q, off the back of several new commercial products

O3 Mining Inc (CVE:OIII) (OTCMKTS:OQMGF) hails drill assays from the Simkar sector at its Alpha property in Québec

Gold Resource Corporation (NYSEAMERICAN:GORO) (FRA:GIH) reports net income of $4.4M in 2020 after solid production from Mexico

Victory Resources Corporation (CSE:VR) (OTCMKTS:VRCFF) (FRA:VR62) poised to start drilling at Loner property in March this year after receiving permit

Mountain Valley MD Holdings Inc (CSE:MVMD) (OTCQB:MVMDF) sees its first revenue via deal with Circadian Wellness for Qucksome technology

Viscount Mining Corp (CVE:VML) (OTCQB:VLMGF) kicks off field work at Silver Cliff property, Colorado

Nerds On Site Inc (CSE:NERD) (OTCMKTS:NOSUF) says 2Q revenue rises nearly 8% as coronavirus boosts remote working and learning

9.41am: Wall Street off to cautious start

The main indices on Wall Street got off to a cautious start on Thursday despite a fall in US jobless claims.

Shortly after the opening bell, the Dow Jones Industrial Average was flat at 31,962, while the S&P 500 dropped 0.16% to 3,919 and the Nasdaq fell 0.29% to 13,559.

Investors seemed mostly unfazed by the US jobless claims data, which showed that in the week to February 19 around 710,000 Americans filed for unemployment benefits, down from 842,000 the previous week and lower than expected by analysts.

While the decline in jobless claims may be welcomed by some, some analysts have highlighted that claims remain well-above pre-pandemic levels and also may be disguising the closure of some unemployment offices due to the recent winter storms.

8:00am: Wall Street set for another red open

Wall Street is set for a cautious opening after a new record high on the Dow on Wednesday. The positive mood surrounding a global recovery is balanced by continuing concerns about rising inflation and when central banks will have to deal with it by raising rates.

The Dow Jones Industrial Average is expected to open around 13 points lower at 31,948 while the S&P futures are down 0.3% and Nasdaq is showing a 1% decline as tech stocks come under pressure again.

Soothing words from US Federal Reserve chairman Jerome Powell only appear to have gone so far in easing these worries.

So US numbers due later will be carefully watched. A second reading of US GDP growth for the fourth quarter is expected to see a revision upwards from 4.0% to 4.2%. There are also figures for growth in durable goods - cars, fridges and the like - which are forecast to rise from 0.5% in December to 1.1% last month.

On top of all that come the weekly jobless claims. They are predicted to drop from 861,000 to 825,000, with the caveat that last week's figures were much higher than expectations.

On the company front come fourth-quarter results from pharmaceutical group Moderna Inc (NASDAQ:MRNA), one of the suppliers of coronavirus vaccine.

Michael Hewson, chief market analyst at CMC Markets UK, said: "Unlike its larger peers Moderna’s share price has seen massive gains over the last 12 months, as the small company in Cambridge Massachusetts muscled its way to the forefront of the US response to the Coronavirus pandemic, with its shares up over 500% since last March.

"Unlike AstraZeneca, the Moderna vaccine isn’t being provided at cost, which means the company is likely to make billions of US dollars from its product... In January Moderna raised its lower end estimate for global production to 600m doses in 2021, with the hope it can deliver up to 1bn doses. Moderna’s biggest problem will be economies of scale. Can it build up its production capability to not only deliver on its COVID-19 vaccine, but will it also be able to deliver new vaccine candidates for seasonal flu, HIV and the Nipah virus using the same biotechnology? The company is expected to post a loss of $0.37c a share for Q4, as it looks to invest in large scale manufacturing capacity."

After the market closes come figures from newly listed Airbnb, which are expected to show a fourth quarter loss of US$132m, down from US$276m the same time last year.

Three things to watch for on Thursday:

  • Key reporters in the earnings diary today include software group Salesforce.com Inc (NYSE:CRM), accommodation platform Airbnb Inc (NASDAQ:ABNB) and real estate investor American Tower Corp (NYSE:AMT)
  • Pharmaceutical firm Merck & Co Inc (NYSE:MRK) may also attract interest following news that it will acquire autoimmune diseases specialist Pandion Therapeutics Inc in a deal worth US$1.85 billion.
  • With GameStop Inc (NYSE:GME) shares once again in the news, other beneficiaries of the Reddit trading frenzy last month could draw investor attention again, namely cinema chain AMC Entertainment Holdings Inc (NYSE:AMC), Nokia and BlackBerry Ltd (NYSE:BB)

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