[서울파이낸스 남궁영진 기자] In the New York Stock Market, the leading indexes all fell sharply. The speculative behavior of individual investors in some stocks, which has recently emerged due to the sluggish performance of major companies, raised market anxiety.
Although the Federal Reserve System (Fed) froze the base interest rate and the size of asset purchases, it was already expected and the impact on the market was minimal.
On the 27th (local time) on the New York Stock Exchange, the Dow Jones 30 Industrial Average closed at 30,303.17, down 633.87 points (2.05%) from the battlefield. This is the largest drop since October last year.
The Standard & Poor’s (S&P) 500 index fell 98.85 points (2.57%) to 3,750.77, while the technology-oriented NASDAQ index fell 355.47 points (2.61%) to 13,270.60.
On this day, the New York Stock Market fell sharply as a number of factors were mixed in the fatigue of the surge that continued from the end of last year.
The announcement that the US aircraft manufacturer Boeing made a net loss of $1.94 billion (about 13.2 trillion won) last year, the largest ever last year, had a negative impact on investment sentiment. Boeing’s share price fell 4.1% on that day. Even the semiconductor company AMD, which announced better-than-expected results from Wall Street, plunged 6.2%.
Some analysts say that an abnormal surge in some stocks due to the counterattack of individual investors, which has become a hot topic in recent years, has caused a negative effect on the overall stock market.
The background is that individual US investors gathered through the online community inflicted huge losses on hedge funds by intensively buying stocks such as GameStop and AMC Entertainment, a video game distribution chain that were targeted by large short sellers.
Hedge funds that sold these stocks short sold other stocks to compensate for the damage caused by the unexpected stock price surge, leading to a cascading downturn. Gamestop shares soared more than 130% this day, and AMC surged 300%.
The US media, including CNBC Broadcasting, reported concerns about the speculative behavior of individual investors, and reported that regulators need to intervene to crack down on certain stock crazes through social media. TD Ameritrade also restricted transactions such as intraday game stop and AMC to reduce customer risk.
The US central bank, the Federal Reserve System (Fed), decided to freeze the standard interest rate at the current’zero interest rate’ level and maintain the asset purchase program, but it was not enough to prevent the bearish market. Rather, the decline was even greater after Fed Chair Jerome Powell said at a press conference that the US economic outlook was “very uncertain.”
The Chicago Options Exchange (CBOE) Volatility Index (VIX), called Wall Street’s’Fear Index’, has crossed the 30th line, the highest since December last year.
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