By Liz Moyer
Investing.com -- Amid a short squeeze in certain retail stocks, the broader market tumbled on Wednesday on weak earnings.
The Dow Jones Industrial Average fell almost 700 points at their worst in the afternoon and the S&P 500 shed more than 2.8%.
The Federal Open Market Committee kept its benchmark rate in a range of 0% to 0.25% and maintained its monthly pace of bond purchases, saying the recovery will depend “significantly” on the course of the coronavirus, including progress on vaccinations.
It’s a major week for earnings, including Apple Inc (NASDAQ:AAPL) and Facebook Inc (NASDAQ:FB) later in the afternoon Wednesday. Boeing Co (NYSE:BA)fell 4% after a bigger than expected quarterly loss, and Starbucks Corporation (NASDAQ:SBUX) fell 6% on falling same store sales.
Here are three things that could affect the markets tomorrow:
1. Airlines earnings
On Thursday, American Airlines Group (NASDAQ:AAL) and Southwest Airlines Company (NYSE:LUV) report earnings. Travel did increase in the final months of the year but it’s going to take several quarters for airlines and other travel companies to make up their losses from the pandemic shutdowns.
American is expected to report a loss of $4.11 a share on revenue of $3.89 billion. Southwest is expected to report a loss of $1.67 a share on revenue of $2.12 billion.
2. Fast food giant profits
The pandemic was good for take-out fast food, and that should be good news for McDonald’s Corporation (NYSE:MCD). The burger and fries giant is expected to post profit of $1.78 a share on revenue of $5.36 billion.
3. The short squeeze game
It’s been the story of the week and promises to keep on giving. A huge battle between professional and retail traders continues to play out in the shares of GameStop Corp (NYSE:GME), AMC Entertainment Holdings Inc (NYSE:AMC), BlackBerry Ltd (NYSE:BB) Express Inc (NYSE:EXPR), and Koss Corporation (NASDAQ:KOSS) -- the five most popular stocks on Investing.com.
All five have notched eye-popping gains in the last few days, and massive trading volume in their shares has caused disruptions on online platforms such as TD Ameritrade (NASDAQ:AMTD) and Schwab. Some brokers have put trading restrictions on the shares, and the exchanges have halted some of them for trading multiple times because of volatility.
The craziness lifted the retail ETF, SPDR® S&P Retail (NYSE:XRT), to a new 52-week high on Wednesday.