Back to Earth

By Alex Eule | Monday, February 1

Fundametals. Traders took the weeked to catch their breath and sanity seemed to return to markets. The recent short-squeeze stocks, led by GameStop, gave up more of last week's gains, with the videogame retailer down 31% on the day. (The stock is down another 18% in after-hours trading tonight.) Other volatile stocks from last week were also down sharply on the day, including Bed Bath & Beyond (-14%) and movie theater chain AMC Entertainment (-9%). 

Their pain was a boon for the rest of the market, which climbed, as investors seemed to remember that earnings season is actually going really well, just as the vaccine rollout is picking up steam. The S&P 500 gained 1.6%, while the Nasdaq Composite jumped 2.5%, the tech-heavy index's best day since its post-Election Day rally on Nov. 4. 

The broad rally follows stocks' worst week since October. There were multiple pieces of good news: a report from the Congressional Budget Office that real gross domestic product could return to its pre-pandemic level by the middle of this year, while the job market could regain its pre-Covid size by 2022. Meanwhile, a survey from the Institute for Supply Management showed that manufacturing continues to recover -- the ISM's manufacturing index has now expanded for eight straight months. 

Investors -- and the world -- got good news on the vaccine front, as well. BioNTech and Pfizer, makers of one of two approved Covid-19 vaccines in the U.S., said it would be boosting its 2021 vaccine output to 2 billion doses, up from a previous 1.3 billion forecast.

While GameStop had a quiet day, the retail traders that powered the move seem to be looking for new targets. One early favorite could be silver. The precious metal jumped 9.3% on the day to $29.40 an ounce. It was silver's biggest one-day move since 2009 and its highest close since 2013. Barron's Callum Keown has more on silver's big day here, including the stocks benefiting from the rally.