• The Star Staff

EU targets online platforms after Wall Street short squeeze

Online platforms like Robinhood in the United States that offer commission-free share trading to retail investors would be illegal in the European Union, officials from the bloc said on Tuesday.


Optimism over monetary and fiscal support from policymakers, robust corporate earnings and the prospect that coronavirus vaccines could hasten a return to normality in the United States and other countries have bolstered risk sentiment.


But concern remained over the pace of vaccination, its efficacy against new variants of the novel coronavirus and the damage being done to economies, including the impact on the dollar of a $1.9 trillion stimulus package.


“We’ve come a long way in a short time,” said Josh Wein, portfolio manager with Hennessy Funds. “It won’t take a lot for the market to pause ... whether it’s deliberations over fiscal stimulus, or the occasional talk of inflation or interest rates getting some lift.”Tesla Inc was the only major technology stock trading higher.


At 11:53 a.m. ET the Dow Jones Industrial Average rose 481.33 points, or 1.59%, to 30,872.93, the S&P 500 gained 41.22 points, or 1.11%, to 3,768.08, and the Nasdaq Composite gained 37.89 points, or 0.29%, to 12,856.85.


The small-cap Russell 2000 index jumped 2.5% to a record high.


Hopes of a vaccine-powered economic recovery in 2021 pushed Wall Street’s main indexes to record highs in late-December, with sectors that had previously lagged, including banks, industrials and energy, fuelling the rally.


Invesco Solar ETF gained about 10.6% on expectations that clean energy companies will benefit under a Democrat-controlled Congress, while bets on decriminalizing marijuana at the federal level lifted ETFMG Alternative Harvest ETF up 9.3%.


AmerisourceBergen Corp gained 7.3% after the U.S. drug wholesaler said it would buy Walgreens Boots Alliance’s drug distribution business for $6.5 billion to expand in Europe. Dow component Walgreens rose 4%.


Advancing issues outnumbered decliners for a 2-to-1 ratio on the NYSE and a 2.5-to-1 ratio on the Nasdaq.


The S&P 500 posted 75 new 52-week highs and no new low, while the Nasdaq recorded 370 new highs and 13 new lows.


Holders of a short position in stocks must disclose it to EU regulators and Bassi said potential changes could include publishing which stocks have short positions on a weekly or fortnighly basis.


“We could think of rules clarifying the duties of brokers or investment advisors and their firms when they participate in online chat rooms,” Bassi said.


Maijoor said there were only 20 stocks in Europe with net short positions of above 10%, limiting the risk of a GameStop-style short squeeze.

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