Dow, S&P, Nasdaq rise over 1% each, GameStop falls 60%

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U.S. equity markets rallied Tuesday as bipartisan COVID-19 relief talks appeared to be making headway on Capitol Hill.

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The Dow Jones Industrial Average gained 476 points, or 1.58%, while the S&P 500 and the Nasdaq Composite advanced 1.39% and 1.56%, respectively.

GameStop Corp. shares fell for the second session as bulls and bears continue to do battle in the highly volatile stock. Shares plunged 60% to their largest one-day percentage drop ever. Other recent high flyers, including AMC Entertainment Group, Bed Bath & Beyond Inc. and BlackBerry Ltd. were also under pressure.

In Washington, President Biden met with 10 Republican Senators on Monday afternoon to discuss their approximately $618 billion COVID-19 aid package that would extend a third round of stimulus checks to some Americans, grant an additional $300 a week in supplemental unemployment benefits through June and provide $50 billion for small businesses. He is lunching with U.S. Treasury Secretary Janet Yellen today who was also meeting with the Democratic caucus.


Looking at corporate and earnings news, United Parcel Services Inc. said adjusted quarterly profit rose 27% year over year as the e-commerce boom fueled by the COVID-19 pandemic resulted in a surge in home-delivery demand. The company also received a boost from its role in delivering COVID-19 vaccines.

Pfizer Inc. forecast $15 billion in sales from the COVID-19 vaccine it is producing along with BioNTech and raised its full-year outlook. Prior quarter sales from the vaccine were one-third of what was expected.

U.S. pharmacies including CVS, Costco, Walmart, Walgreens and others are expected to start receiving COVID-10 vaccines next week.

In deal news, Uber is buying alcohol delivery app Drizly for $1.1 billion.

Exxon Mobil Corp. announced an additional $3 billion of expense reductions and reported its first annual loss in 40 years as the COVID-19 pandemic resulted in a sharp drop in demand for oil and gas. The oil giant also created a “Low Carbon Emissions” unit that will help reduce greenhouse gases by up to 20% by 2025.  The oil giant reportedly held talks with rival Chevron during the height of the pandemic last year, as reported by the WSJ.

Meanwhile, Harley-Davidson Inc. unveiled its five-year turnaround plan called “The Hardwire” as shipments to dealers plunged 32% from a year ago to their lowest level since 1997. Annual retail sales, meanwhile, sank 17% to the weakest since 1998.

Elsewhere, Tesla Inc. announced it would recall 134,951 Model S and Model X vehicles after a U.S. regulator warned their touchscreen displays could fail.

Tech giants Alphabet Inc. and Amazon Inc. will report their quarterly results after the closing bell.

In commodities, silver plunged $3.014, or 10%, to $23.38 an ounce a day after posting their largest gain in almost 12 years. Elsewhere in the space, gold fell $30.30 to $1,830.50 an ounce and West Texas Intermediate crude oil jumped $1.21 to $54.76 a barrel.


Overseas markets were higher across the board with France’s CAC 40 leading the advance in Europe, trading up 1.86%, while Germany’s DAX 30 and Britain’s FTSE 100 climbed 1.56% and 0.78%, respectively.

In Asia, Hong Kong’s Hang Seng index gained 1.23%, Japan’s Nikkei 225 rallied 0.97% and China’s Shanghai Composite index added 0.81%.

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