Shares of banks and other financial institutions fell amid concerns about the stability of global markets in light of continued wild swings.
Short-sellers remained exposed to some of the stocks that day traders are buying up with the express goal of causing "short squeezes," where hedge funds would be forced to buy back their bets.
In a reflection of the instability caused by the activity, the trading app that most of the day traders favor, Robinhood Markets, said it raised $1 billion because of the increased cost of executing trades. The app restricted investors' ability to purchase shares in GameStop and 12 other companies on Thursday as it calculated the financial implications of the upheaval for its business.
The Securities and Exchange Commission indicated that it's examining potential misconduct around the trading mania that swamped stocks such as GameStop, AMC Entertainment Holdings and Novavax.
One firm that's made a name for itself as a crusading short seller by exposing fraud at Valeant Pharmaceuticals and others, Citron Research, said it would stop publishing short sale recommendations, and switch to conventional stock-recommendation research. The German government dismissed the head of the country's markets regulator, Bafin's Felix Hufeld, after months of intensifying criticism over the agency's handling of the electronic-payment company Wirecard's downfall. Current and former employees of Pacific Investment Management Co. wrote to the investment firm's senior executives alleging a pattern of abusive and discriminatory behavior toward women and urging them to take steps to fix gaps in pay and promotions.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
01-29-21 1811ET
