After a tumultuous day on Wednesday, trading on Wall Street began Thursday with a measure of calm.
The S&P 500 rose more than 1 percent in early trading, following a 2.6 percent drop on Wednesday, its worst single-day decline since October.
The gains came after data showed that the U.S. economic recovery continued, albeit at a slower pace, in the fourth quarter. Though gross domestic product ended 2020 down 2.5 percent from a year earlier, the rebound has been significantly stronger than most forecasters expected last spring.
European markets opened lower before recovering some of their losses, and Asian markets closed in the red.
Still, investors are facing a host of concerns, which has increased volatility. There is uncertainty about whether the market can sustain its relentless rise of recent months, and whether asset bubbles are starting to form. They are also worried about whether the Biden administration will be able to quickly pass an ambitious stimulus spending program or be forced to pare it back to get a bill through a Senate without a solid Democratic majority. And investors are watching the pace of the coronavirus vaccine rollout, wary of delays that could push back the economic recovery around the world.
“The assumption was by the time we got to midyear we were fully back to normal and that’s being questioned,” said Karen Ward, a strategist at J.P. Morgan Asset Management.
“The whole timeline of vaccine rollout and that point of normality is going back a few months,” she added. “The markets are pretty comfortable waiting as long as they know that the economic cost that’s incurred in the interim is absorbed by governments.”
Unease also stemmed from the shocking run-up in shares of companies with big brand names but uncertain prospects, like GameStop, the video game retailer; AMC, the movie theater chain; and BlackBerry, once the maker of hand-held devices that no financial professional would leave the office without. The surge in those shares pointed to frothy conditions in financial markets, suggesting a bunch of amateurs investors could take the reins and force steep losses on established hedge funds.
Shares of a number of companies reacted to earnings reports. Tesla and Apple both dropped after their reports, while Facebook rose.
The Stoxx Europe 600 rose 0.1 percent.
The FTSE 100 in Britain fell 0.5 percent, the DAX in Germany rose 0.2 percent, and the CAC 40 in France rose 0.9 percent.
In Japan, the Nikkei 225 index tumbled 1.5 percent.
China-related stocks also suffered. The Shanghai Composite Index fell 1.9 percent, while Hong Kong shares were down 2.6 percent.
American Airlines’ share price jumped on Thursday as…
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