Shares of banks and other financial institutions rallied as investors rotated back into the sector despite continued upheaval in the U.S. stock market caused by a standoff between day traders and hedge funds.
Credit-card provider Mastercard logged a smaller decline in quarterly revenue than in recent periods, but the Covid-19 pandemic continued to spur weakness in cross-border spending.
Popular online brokerages including Robinhood Markets, Interactive Brokers Group, and Webull Financial, restricted access to trading stocks including GameStop and AMC Entertainment, drawing sharp rebukes from individual investors and from political leaders ranging from Republican Sen. Ted Cruz to Democratic Rep. Alexandria Ocasio-Cortez.
"Taking advantage of a structural weakness in the stock market won't last because it is wreaking havoc on the brokerages' risk models and they have every right to increase margins," said Edward Moya, senior market analyst at foreign-exchange brokerage OANDA Group, in a note to clients. Meanwhile, the ripple effects of the short squeezes on hedge funds such as those run by Melvin Capital Management appeared to spread to other major hedge funds such as Point72 Asset Management, which has reportedly seen heavy losses in recent weeks.
British insurance firm Prudential said it plans to separate its U.S. business Jackson Financial through a demerger and that it is considering an equity raise of up to $3 billion as it doubles down on Asia.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
01-28-21 1731ET
