US Stocks Sink On Mixed Earnings, Valuation Worries

US stocks tumbled early Wednesday as Wall Street digested mixed earnings and awaited a Federal Reserve monetary policy decision amid concerns over lofty equity valuations

New York, (UrduPoint / Pakistan Point News - 27th Jan, 2021 ):US stocks tumbled early Wednesday as Wall Street digested mixed earnings and awaited a Federal Reserve monetary policy decision amid concerns over lofty equity valuations.

Large companies were trading in opposite directions, with Microsoft higher on blowout results and Boeing sinking after reporting a whopping $11.9 billion annual loss.

Investors were looking ahead to an afternoon Fed announcement expected to extend the central bank's easy-money policies. There will also be earnings after the market close from Apple, Facebook and Tesla.

About 20 minutes into trading, the Dow Jones Industrial Average was down 1.7 percent at 30,402.79.

The broad-based S&P 500 slid 2.

0 percent to 3,771.86, while the tech-rich Nasdaq Composite Index plunged 2.1 percent to 13,336.01.

Briefing.com analyst Patrick O'Hare said the declines also reflect investor skittishness following outsized gains in recent days by GameStop and AMC Entertainment, which created a "short squeeze."That's when prices rise as short-sellers, who bet on a drop in stock price but are then confronted with a surprise increase, are forced to buy shares to stem their losses. Shares of GameStop were up 105 percent, while AMC was up nearly 250 percent.

Those kind of increases are "the type of mania longtime investment professionals know is often associated with a market that is overheated and in need of a rest/correction," O'Hare said.