The Treasury secretary, Janet Yellen, is expected to meet with the heads of financial market regulators, including the Federal Reserve and Securities and Exchange Commission, this week to discuss the market volatility created by retail traders in “meme stocks” such as GameStop, Reuters reported.
The meeting is a sign of heightened scrutiny in Washington toward the frenzy in trading over the past 10 days. Shares in GameStop, a video game retailer, recorded a remarkable surge last week but have since fallen from their dizzying heights, testing the will of investors who joined in the fervor as a challenge to Wall Street investors. Since Friday, the price of GameStop stock has plummeted from $325 to $90.
The shares fluctuated in premarket trading on Wednesday, at one point up as much as 17 percent.
AMC Entertainment, another company whose shares were embraced by online traders, also meandered in premarket trading, coming off a 41 percent drop the previous day.
The retreat on Tuesday allayed concerns that the big hedge funds who were on the losing end of GameStop’s surge would have to sell shares of other, larger companies to make up for the losses. The S&P 500 index is set for a third consecutive day of gains.
Silver prices were little changed, after falling 9 percent on Tuesday. That downturn undid gains on Monday, when a spurt of online chatter briefly pushed up the market value of silver an eight-year high.
Elsewhere in markets, Wall Street futures rose, following most European and Asian indexes higher, amid some strong earnings reports.
Alphabet, Google’s parent company, and Amazon both reported record sales in the past quarter. Sony said its profit jumped 20 percent as its entertainment and gaming divisions helped alleviate the boredom of consumers stuck at home.
Jeff Bezos, Amazon’s founder, said he would step down as chief executive this summer and would become executive chairman. In recent years, Mr. Bezos had stepped back from much of Amazon’s day-to-day business, delegating those responsibilities to two main deputies, including Andy Jassy, who will take over as chief executive. Shares were up 1.2 percent in premarket trading.
Europe
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Italy’s stock market was the best performing in Europe, with the FTSE MIB index rising 2.2 percent on Tuesday, after Mario Draghi was tapped to be the next prime minister and form a new government. Mr. Draghi, a former head of the European Central Bank, was instrumental in steering the region out of a debt crisis just under a decade ago.
Asia
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Alibaba said on Tuesday that it was conducting internal reviews of its business in response to an antitrust investigation by the Chinese government. Alibaba saw a 37 percent increase in sales in the latest quarter, with $12.2 billion in profit on $33.9 billion in revenue.
The pandemic has been disastrous for the overall economy. But for companies peddling much needed entertainment for bored consumers trapped at home, it has been a bonanza.
Take Sony of Japan. On Wednesday, the company reported that its profit leapt almost 20 percent, to $3.4 billion, during the three month period that ended in December, compared with the same period a year earlier.
The windfall was largely driven by the company’s entertainment and gaming divisions. Demand for its newest game system, the PlayStation 5, helped raise sales for games and other digital content, the company said in an announcement of its quarterly financial results.
Over the last decade, Sony, once known as the world-beating, A-to-Z provider of high-end consumer electronics, has increasingly relied on its PlayStation console to fuel its results.
The release of the much-anticipated fifth iteration of the gaming system in mid-November has been a rousing success, with eager fans sometimes fighting to get their hands on one of the devices. The company had sold 4.5 million units by the end of December, Sony said.
Sony’s profit comes not from the machines themselves, but the content they power. Quarterly revenue from software and network fees increased 40 percent to $8.4 billion, the company said, powered by a 30 percent increase in total playtime on its network service compared with the same period in 2019.
The segment accounted for about one-third of the company’s profit in the first nine months of this fiscal year.
Sony also saw significant growth in profit from its music and film segments, the company said.
The windfall, which included surprise growth in sales of its consumer elections, led Sony to raise its financial forecast by about one-third to $8.5 billion for fiscal year 2020, which in Japan runs through March.
