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Dow Rallies as Bulls Back Tech; Silver the New Squeeze on Street

Stock MarketsFeb 01, 2021 04:09PM ET
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By Yasin Ebrahim

Investing.com – The Dow made a positive start to the week Monday, as the spike in volatility that rattled markets in the final days of January subsided after investor focus shifted to another busy week of quarterly results. 

The Dow Jones Industrial Average rose 0.76%, or 229 points. The S&P 500 was up 1.57%, while the Nasdaq Composite jumped 2.55%. 

Investor sentiment on stocks returned following a rocky end to the week last month as intensity of the retail-led short-squeeze eased, pushing the VIX – the so-called fear index – down more 9%.

GameStop (NYSE:GME) slumped 31% as retail investors shifted efforts to Silver Futures, squeezing short sellers of the metal. Silver Futures prices rose 9% to a more than eight-year high. But there is growing uncertainty as to whether the bid higher in the metal was driven by retail investors on social media forum Reddit, or by hedge-funds.  Famed-subreddit "wallstreetbets" appeared to distance itself from the trade, which appears to be mainly driven by bullish calls on the metal from subreddit "Wallstreetsilver."         

The other popular short-squeeze stocks were mostly lower. 

AMC Entertainment Holdings (NYSE:AMC) was up 0.5%, Express Inc (NYSE:EXPR) fell 17%, BlackBerry (NYSE:BB) was up 4%, Nokia Corp ADR (NYSE:NOK) was up 7%, and Bed Bath & Beyond (NASDAQ:BBBY) fell 14%.

Tech led the broader market with the Fab 5 leading to the upside.

Amazon.com (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), both of which report earnings later this week, were up more 4 and 3% respectively. Microsoft (NASDAQ:MSFT) was up 3%, while Apple (NASDAQ:AAPL) and Facebook (NASDAQ:FB) were up more than 1%.

Apple reportedly plans to sell six-part $14 billion bonds, taking advantage of cheap borrowing rates with a view to returning more cash to shareholders, Bloomberg reported, citing unknown sources.

Qualcomm (NASDAQ:QCOM), eBay (NASDAQ:EBAY) and PayPal Holdings (NASDAQ:PYPL) are also among the notable companies set to report earnings later this week.

The fourth quarter of earnings is shaping up to be one of the strongest on record, with the roll out of vaccines and easing pandemic impact also helping to improve visibility.

Overall, 37% of the companies in the S&P 500 have reported results for Q4 2020, with about 82% reporting EPS above estimates, which is above the five-year average of 74%, the company said.

"If 82% is the final percentage for the quarter, it will mark the second-highest percentage of S&P 500 companies reporting a positive EPS surprise since FactSet began tracking this metric in 2008," FactSet said.

Energy stocks, meanwhile, turned positive on rising oil prices as Saudi Arabia started to cut production by 1 million barrels a day, following its pledge to do so last month in order to offset production increases by Russia and Kazakhstan.

Focus on stimulus effort were also renewed as a group of ten Republican Senators reportedly proposed a more targeted, but significantly lower $600 billion stimulus package to President Joe Biden.  That is well below the president's $1.9 trillion stimulus package proposal.  

"Reentering stimulus discussions appears to be giving equities a welcome boost as the stock market tries to reset after its worst week since October," Stifel said in a note.

In other news, Tesla (NASDAQ:TSLA) jumped about 6% after Piper Sandler (NYSE:PIPR) upgraded its price target on the stock to $1,200 from $515, citing new levels of growth for decades to come.   

Dow Rallies as Bulls Back Tech; Silver the New Squeeze on Street
 

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Comments (29)
Abcdefg Abcdefg
Abcdefg Abcdefg Feb 01, 2021 7:17PM ET
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https://www.investopedia.com/terms/n/nakedshorting.asp
Tyrone Jackson
Tyrone Jackson Feb 01, 2021 7:04PM ET
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All the reddit boys are shifting their pants lol Have no idea about gold silver platinum. They don’t hold any And most have never held .999
Pradeep Kannaiah
Pradeep Kannaiah Feb 01, 2021 6:26PM ET
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Silver ProducersAG, FSM, PAAS, CDE, SVM, ASM, EXN, MUX/Nearing productionAXU, EXK, SILV, MAG/Silver junior miningELEF, CCW, GRSL, IPT, MMG
VFor Vendetta
V4Vendetta Feb 01, 2021 6:22PM ET
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Holding the line! 💎🙌
Lucke Black
Lucke Black Feb 01, 2021 6:07PM ET
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Silver squeeze. Physical, not paper 😎
Brandon Smith
Brandon Smith Feb 01, 2021 6:04PM ET
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Silver is trap bait. Dont fall for it.
Enron Mask
Enron Mask Feb 01, 2021 6:04PM ET
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JP is biggger holder of silver and has HUGE short there, why?
Peewee Dahmer
Peewee Dahmer Feb 01, 2021 5:54PM ET
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wallstreetbets had zero to do with silver100% gme silver is held long by Melvin and the capital squad. no way they would help line those pocketsSLV has been a highly manipulated stock forever.
New Jazenevd
New Jazenevd Feb 01, 2021 5:37PM ET
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Perhaps, some folks in this thread don’t get it why silver move is important. It is possible to be a preview of impending gold move. Silver market is much smaller than gold and can be moved easier. Gold market is much larger and its move would have profound investment impact.
Sun Moon
Sun Moon Feb 01, 2021 5:29PM ET
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Takes 2 seconds to learn that silver is NOT the "new squeeze."
New Jazenevd
New Jazenevd Feb 01, 2021 5:29PM ET
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It is unlikely that silver moved exclusively by retail folks. Funds have a hand in this. It is natural for silver and gold to move higher in this zero rate environment.  Reddit’s just triggered the move. Wait for gold to join silver, that move would be just impossible to explain by Reddit etc.
 
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