Here are five things you must know for Tuesday, Feb. 2:
1. -- Stock Futures Rise on Stimulus Bets, Vaccine Progress
Stock futures traded higher Tuesday as hopes grew for more U.S. stimulus, progress was made on vaccinations and investors looked ahead to earnings from tech giants Amazon.com (AMZN) and Alphabet (GOOGL) .
Contracts linked to the Dow Jones Industrial Average rose 245 points, S&P 500 futures gained 32 points and Nasdaq futures were up 111 points.
President Joe Biden held on Monday what was described as a productive meeting with 10 moderate Republican senators to discuss stimulus options. The president is pushing for a coronavirus relief package of $1.9 trillion, while Republicans have countered with an offer of $600 billion.
Following the meeting, Biden's press secretary said the president intended to continue pressing for a larger bill, even if it didn't come with Republican support.
“The sound of more stimulus, which tends to raise all boats, was music to the market’s ears,” said Stephen Innes, chief global market strategist of Axi.
On the virus front, more Americans have received at least one dose of a Covid-19 vaccine than have tested positive for the virus.
According to Bloomberg, 26.5 million Americans had received one or both doses of the current vaccines, while 26.3 million people have tested positive for Covid-19, the disease caused by the coronavirus.
More than 443,000 people in the U.S. have died from the virus, according to data from Johns Hopkins University.
2. -- GameStop Slumps and Silver Pulls Back
Shares of GameStop (GME) slumped in premarket trading Tuesday and silver pulled back from an eight-year high as it appears frenzied retail trading that has gripped the markets over the past two weeks was fading.
GameStop dropped 41.53% to $131.55 early Tuesday after declining 31% in Monday's regular session. The video game retailer, and other heavily shorted names such as AMC Entertainment (AMC) and Koss Corp. (KOSS) , have seen manic gains in recent weeks, fueled largely by online communities such as Reddit’s WallStreetBets forum.
Silver prices fell Tuesday after the Chicago Mercantile Exchange lifted margin requirements.
The CME said margins will rise to $16,500 per contract from $14,000, effective Tuesday, based on “the normal review of market volatility to ensure adequate collateral coverage."
Silver futures for March delivery fell 5.57% to $27.78 an ounce. The March silver contract settled at $29.32 on Monday, up 9.3%.
3. -- Robinhood CEO to Testify Before House Committee on GameStop
Robinhood CEO Vlad Tenev is expected to testify before a U.S. House committee on Feb. 18, Politico reported, following the backlash over its decision to limit trading in highly leveraged stocks such as GameStop.
Robinhood abruptly limited trading in GameStop last Thursday amid an apparent short squeeze on it and other struggling companies.
The decision by the online trading app drew criticism from Rep. Alexandria Ocasio-Cortez (D-New York) and Sen. Ted Cruz (R-Texas) and other lawmakers.
House Financial Services Chair Maxine Waters (D-Calif.) and other Democrats have vowed to investigate what role Wall Street hedge funds may have played in the move to halt trading, Politico reported.
Robinhood said it was forced to limit trading because of huge costs associated with settling the massive number of trades.
“It was not because we wanted to stop people from buying these stocks,” Robinhood said.
Meanwhile, Reuters reported that Robinhood has held talks with banks about raising $1 billion in debt so it can continue to fulfill orders for heavily shorted stocks.
The capital raised would be separate from the $3.4 billion in financing that Robinhood announced on Monday it had secured from its investors since last Friday, according to Reuters.
4. -- Tuesday's Calendar: Amazon, Alphabet and Alibaba Earnings
United Parcel Service (UPS) posted fourth-quarter adjusted earnings of $2.66 a share vs. analysts' estimates of $2.14.
Pfizer (PFE) reported fourth-quarter adjusted earnings of 42 cents a share vs. Wall Street forecasts of 50 cents. The company also raised its 2021 earnings outlook.
Alibaba (BABA) posted stronger-than-expected fiscal third-quarter earnings thanks to a record Singles' Day shopping event in November, but cautioned that the delayed initial public offering of Ant Group was still subject to "substantial uncertainties."
Exxon Mobil's (XOM) fourth-quarter adjusted earnings of 3 cents a share topped forecasts by 2 cents.
In addition to reports from Amazon and Google parent Alphabet, earnings are also expected Tuesday from ConocoPhillips (COP) , Amgen (AMGN) , Chipotle Mexican Grill (CMG) , Royal Caribbean Cruises (RCL) , Solarwinds (SWI) , Harley-Davidson (HOG) and Electronic Arts (EA) .
The U.S. economic calendar on Tuesday includes Motor Vehicle sales for January.
Economists expect unit vehicle sales to come in at a 16.2 million annual pace in January, a tick below December's lower-than-expected 16.3 million rate
5. -- American Airlines CEO Tells Workers More Furloughs May Be Coming
The CEO of American Airlines (AAL) told employees they should brace for another round of furlough warnings as the airline expects to remain overstaffed on April 1, when government aid for industry workers expires.
“What hasn’t happened is what we’d hoped would happen, that we’d get to April 1 and say oh my god ... everybody we have we’re going to need them in the July schedule,” CEO Doug ParkerParker said during a employee town hall meeting last week, according to a recording reviewed by Reuters.
American was among a number of U.S. airlines that received money from a $15 billion payroll support package in December.