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US stocks close down amid continuing volatility

Last updated: 16:05 27 Jan 2022 EST, First published: 06:10 27 Jan 2022 EST

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4:05pm: US equities close down in another volatile session 

US stocks closed down amid continuing volatility as investors mulled over a better-than-expected fourth-quarter GDP report and an update from the Federal Reserve on its rate hike plan.

GDP jumped 6.9% from the year prior, the Commerce Department reported Thursday as economists expected a 5.5% growth rate.

Also, the Fed has strongly indicated that the first interest rate hike since late 2018 could come as soon as March, sending markets into a tailspin.

On the day, the Dow declined 8 points, or 0.02%, to 34,160 and the S&P 500 dropped 0.54% to 4,326. The tech-heavy Nasdaq fell 1.40% to 13,352.

12.05pm: US indices bounce back - again

US stocks continued to climb midday on Thursday as the latest quarterly data on the US economy indicated that 2021 was the strongest year of growth in the last four decades. 

By noon, the Dow Jones Industrial Average had jumped 495 points, or 1.4%, at 34,663, while the S&P 500 and the tech-heavy Nasdaq Composite gained 1.2% and 0.8%, respectively.

“Rather than rolling over, defeated at the thought of five Fed hikes next year, investors are seizing on the lower valuations and the US has kicked off trading on Thursday on a strong note,” commented Craig Erlam, senior market analyst, UK and EMEA, OANDA. “Whether that can be sustained over the coming weeks, we'll see, but this week will give investors more confidence.” 

He added: “Naturally, it's helped by data showing the economy grew by 6.9% in the last quarter, capping off a strong year of growth, which along with a tight labour market may offer encouragement that higher inflation and interest rates won't derail the recovery in 2022.”

Meanwhile, Apple Inc (NASDAQ:AAPL)'s latest earnings report, due after-hours today, is expected to keep stocks in check.

“Tonight sees the big one – the arrival of Apple earnings for Q4,” said Chris Beauchamp, chief market analyst at online trading platform IG. “Tech stocks are unlikely to recover their poise unless Apple can post some encouraging figures and back it up with a supportive outlook for coming months.”

He noted that Microsoft and Tesla both wobbled on earnings before recovering, so further wild swings should be expected tonight. 

11.50am: Proactive North America headlines:

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East Side Games announces worldwide launch of The Office sitcom-inspired game

Progressive Planet engages PyroGenesis Canada to determine feasibility of producing post-consumer glass nanoparticles

Electric Royalties closes previously announced Rana nickel 1% NSR acquisition

CleanSpark establishes scholarship at Gwinnett Technical College as part of community commitment

ImagineAR partners with Pittsburgh Riverhounds soccer club to support augmented reality activations

BlueRush inks C$850K services contract to boost US alternative lender’s digital transformation

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Think Research extends its COVID-19 virtual education program for healthcare professionals

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Sassy Resources (CSE:SASY, OTCQB:SSYRF) says it has identified a new gold trend in Newfoundland's Gander gold belt

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Star Royalties acquires 2.5% gross revenue royalty on MOBISMART Mobile Off-Grid Power & Storage Inc for C$300,000 cash

Arrow Exploration has issued an operational update and outlined the near-term plans for its Colombian and Canadian assets

ElectraMeccanica (NASDAQ:SOLO) announces the retirement of co-founder Henry Reisner

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Tesla expects to ramp up deliveries in 2022 despite continuing supply chain obstacles

Wellbeing says its subsidiary KGK Science partners with Nova Mentis for developing psychedelic drug portfolio

Golden Minerals pleased with new drill results from Phase 2 program at its Yoquivo gold-silver project in Mexico

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Cabral Gold identifies third gold-in-oxide blanket at Cuiú Cuiú project with drilling

Southern Energy announces spudding of its three well drilling program in the Gwinville gas field in Mississippi

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9.45am: US stocks start on front foot

US indices started Thursday on the front foot as traders appeared to brush off rate rise worries following the Fed meet and mulled GDP data for the fourth quarter last year.

The Dow  Jones Industrial Average added over 296 at 34,465. The S&P 500 surged 43 at 4.394. The tech-laden Nasdaq index added 112 at 13,654.

Official data showed that US gross domestic product jumped 6.9% in the last three months of 2021 compared to the same period a year earlier. Economists has expected the US economy to have grown at a 5.5% annualized pace.

Yesterday, Federal Reserve chair Jerome Powell signaled that the first interest rate hike since late 2018 in the USA could come as soon as March this year, which sent markets lower.

Tech shares were on the up Thursday again. Streaming giant Netflix added over 6% on news that billionaire investor William Ackman has bought 3.1 million shares and now has a stake worth more than $1 billion.

6.10am: US shares set for lower start

US stocks look set to resume Wednesday's late sell-off at the open today after the Federal Reserve signaled a faster pace for interest rate rises following its latest policy meeting.

On Wednesday, the Fed signaled that it would begin raising interest rates in mid-March, its latest step toward removing stimulus to bring down inflation. Fed chairman Jerome Powell said the central bank could continue to lift rates faster than it did during the past decade. 

Futures for the Dow Jones Industrial Average fell 0.6% on Thursday, those for the S&P 500 also lost 0.6%, and contracts for the Nasdaq-100 shed 0.5%. 

US indexes have seen major indexes swing wildly in intraday trading this week, with the VIX hit its highest level in a year on Wednesday. Aside from worries over the Fed decision, markets have also been buffeted by concerns about geopolitical tensions amid uncertainty over a potential Russian invasion of Ukraine.

Earnings season, which is ongoing, is seen as the next big test of whether the stock market’s sky-high valuations can be justified.  

McDonalds, Mastercard, Comcast, Blackstone and Southwest Airlines are set to post results before Thursday’s opening bell. Apple, Visa and food and beverage giant Mondelez (NASDAQ:MDLZ) are due to report after markets close.  

Tesla shares declined in off-hours trading after the electric-vehicle maker posted a record profit. Chief executive Elon Musk said that he wouldn’t introduce new models this year and that the company had been affected by supply-chain disruptions.

The latest US GDP data for the final quarter of 2021 will be released at 8.30am ET, with US initial jobless claims due at the same time.

Cryptocurrencies edged down, with bitcoin extending its decline into a third day to trade below $36,000. Meta Platforms, formerly known as Facebook, is winding down its plans to build a cryptocurrency payments network and is selling its technology to a small bank, The Wall Street Journal reported.

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