US LNG exports surge but will buyers in China turn up?
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* Boeing falls on record annual loss, to delay 777X jet
* Microsoft rises after upbeat quarterly results
* GameStop rally quashes hedge funds, sparks short squeeze
* Dow down 1.54%, S&P 500 down 1.93%, Nasdaq down 1.64%
(Adds Fed statement, changes byline)
By Chuck Mikolajczak
NEW YORK, Jan 27 (Reuters) - U.S. stocks dropped more than
1% on Wednesday, showing little reaction to the latest Fed
statement, as major indexes were weighed down in part by a slump
in Boeing and hedge funds selling off long positions to cover a
short squeeze.
Shares of videogame retailer GameStop Corp GME.N and movie
theater operator AMC Entertainment Holdings Inc AMC.N each
more than doubled on Wednesday, continuing a torrid run higher
over the past week, as amateur investors again piled into the
stocks, forcing short-sellers such as Citron to abandon their
losing bets. "Fears are circulating that some investment funds might be
quickly closing out positions as a way of shoring up their cash
positions. It is early days yet but we might see selling
pressure ramp up for fear there could be a stampede for the
exit," said David Madden, market analyst at CMC Markets UK.
Stocks largely held losses in the wake of the statement from
the Federal Reserve. The central bank kept overnight interest
rate near zero and made no change to its monthly bond purchases,
as was widely expected, and pledged to keep that support intact
until a full economic rebound is in place. "The statement itself really did not contain much new
information, but it did put a lid on fears that the Fed may be
considering tapering asset purchases sooner than expected. If
anything, the Fed added a statement recognizing that the pace of
recovery has moderated in recent months," said Jason Pride,
chief investment office for private wealth at Glenmede in
Philadelphia.
The Dow Jones Industrial Average .DJI fell 475.41 points,
or 1.54%, to 30,461.63, the S&P 500 .SPX lost 74.39 points, or
1.93%, to 3,775.23 and the Nasdaq Composite .IXIC dropped
223.16 points, or 1.64%, to 13,402.91.
Both the Dow and S&P 500 were on track for their biggest
daily percentage decline since Oct 28.
Meanwhile, Boeing Co BA.N fell 2.56% and was among the top
drags on the Dow after the planemaker took a hefty $6.5 billion
charge on its all-new 777X jetliner due to the COVID-19 pandemic
and the aftermath of a two-year safety crisis over its 737 MAX.
In a week packed with quarterly earnings from mega-cap
companies, Microsoft Corp MSFT.O rose 0.83% after its results
as the software maker continues to benefit from remote working
and learning trends globally. Microsoft's results set a positive tone for other
technology-related companies including Apple Inc AAPL.O and
Facebook Inc FB.O , which are set to report quarterly numbers
later in the day.
These heavyweight majors have recently come back into favor
after blowout results from streaming giant Netflix Inc NFLX.O ,
and as investors dumped economy-linked banks, energy and
small-cap stocks.
However, concerns about heightened stock market valuations,
rising coronavirus cases and uneven distribution of vaccine
rollouts have heightened investor worry about a pullback and
increase in volatility in the near-term.
Shares of Apple were little changed, while Facebook slipped
2.56%.
The CBOE Market Volatility index .VIX , often used as a
gauge for investor anxiety, rose as high as 29.65, the its
highest level since Dec 21.
Walgreens Boots Alliance Inc WBA.O jumped 4.80% after the
drugstore chain named the outgoing chief operating officer of
Starbucks, Roz Brewer, as its CEO. Declining issues outnumbered advancing ones on the NYSE by a
3.40-to-1 ratio; on Nasdaq, a 3.52-to-1 ratio favored decliners.
The S&P 500 posted 27 new 52-week highs and no new lows; the
Nasdaq Composite recorded 155 new highs and 20 new lows.