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BUSINESS Wednesday 3 February 2021
Big Tech leads stocks to broad gains; GameStop, AMC tank

By DAMIAN J. TROISE and using the online site Reddit
ALEX VEIGA banded together for the
AP Business Writers past two weeks to snap
Big Tech companies and up shares of GameStop,
banks helped power a AMC and other struggling
broad rally on Wall Street chains, stocks that have
Tuesday, though shares been heavily shorted (bets
in GameStop and other that the stock will fall) by a
recent high-flying stocks number of hedge funds. In
hyped by online traders the process, they’ve done
plunged. heavy damage to those
The S&P 500 rose 1.4%, ex- hedge funds in a stunning
tending gains from a day reversal of financial power
earlier, as investors sized up on Wall Street.
the latest batch of compa- But it’s not clear how much
ny earnings reports. Rising longer the Reddit traders
crude oil prices and solid can hold the line. Intense
earnings results helped lift media and Wall Street in-
energy companies, includ- terest pushed many trad-
ing Exxon Mobil and Mara- ers into these stocks late
thon Petroleum. Treasury last week, with GameStop
yields rose and the VIX, a going as high as $483 last
measure of fear in the mar- Thursday. They began trad-
ket, fell sharply, a sign vola- In this photo provided by the New York Stock Exchange, specialist Meric Greenbaum works at a ing this year at just over $17
tility was easing. post on the floor, Tuesday Feb. 2, 2021. a share. The huge run-up
The wave of buying coin- Associated Press in the stock price appears
cided with a skid in Game- at Baird. “You saw with sil- other sign of investor con- following the bouts of ex- to have little to do with
Stop and AMC Entertain- ver, there was an attempt fidence. The yield on the treme volatility. Robinhood the future prospects of the
ment, stocks that have to try a similar cornering of benchmark 10-year Trea- needed to secure funding mall-based retailer, which
been caught up in a spec- the market, and that didn’t sury note rose to 1.10% from in order to meet deposit has been losing money
ulative frenzy by traders in even last two days.” 1.06% late Monday. thresholds required by or- consistently. While a lot of
online forums and on social The S&P 500 index rose 52.45 GameStop plunged 60% ganizations that handle the people seem to be holding
media who seek to inflict points to 3,826.31. The Dow to $90 a share, and AMC trading orders placed by a line on some of these po-
damage on Wall Street Jones Industrial Average Entertainment lost 41.2% to investors on its platform. sitions, the broader market
hedge funds that have bet gained 475.57 points, or $7.82 a share. Both com- Robinhood eased some of is not showing many signs
these stocks would fall. The 1.6%, to 30,687.48. The tech- panies have been in the the trading limits on Game- of strain because of it, said
price of silver, which spiked heavy Nasdaq compos- spotlight for more than two Stop and select other stocks Darrell Cronk, chief invest-
9% Monday, fueling specu- ite climbed 209.38 points, weeks as an online com- Tuesday. For example, it ment officer of Wells Fargo
lation the precious metal or 1.6%, to 13,612.78. The munity of investors pushed now allows users to buy up Wealth and Investment
was also being hyped up Russell 200 index of smaller the stocks to astronomical to 100 shares and options Management.
by online traders, sank by companies also rose, add- levels. contracts in GameStop “I hope the markets are
more than 10%. ing 25.28 points, or 1.2%, to Trading in those and several and 1,250 in AMC. On Mon- moving away from some
“Certainly, there’s been 2,151.44. The major indexes other stocks have been re- day, the brokerage was of the issues it dealt with
some profit-taking in these remain near their all-time stricted by the popular on- limiting users to 5 shares in last week and focusing on
names,” said Ross May- highs set last month. line trading platform Robin- GameStop and 75 in AMC. more of the true funda-
field, investment strategist Treasury yields rose in an- hood since last last week An online army of traders mentals,” Cronk said..q

FTC says Amazon took $62 million in tips from drivers

By JOSEPH PISANI company," said FTC Com- per hour. It also told them
AP Retail Writer missioner Rohit Chopra in they would receive 100% of
NEW YORK (AP) — Amazon a statement. "But, rather tips given to them by cus-
is paying nearly $62 million than coming clean, Ama- tomers on the app.
to settle charges that it took zon took elaborate steps to But in 2016, Amazon start-
tips from its delivery drivers. mislead its drivers and con- ed paying drivers a lower
The Federal Trade Com- ceal its theft, sending them hourly rate and used the
mission said Tuesday that canned responses that tips to make up the differ-
Amazon didn't pass on tips repeated the company's ence, according to the
to drivers for more than two lies." complaint.
years, even though it prom- The drivers were part of Amazon didn't disclose the
ised shoppers and drivers it Amazon's Flex business, change to drivers, the FTC
would do so. which was founded in 2015 said, and the tips it took
The FTC said Amazon didn't and allows people to deliv- from drivers amounted to
stop taking the tips until er Amazon packages with $61.7 million.
2019, when the company their own cars. The drivers Seattle-based Amazon. In this Oct. 1, 2020 file photo, an Amazon Prime logo appears on
found out about the FTC's are independent workers, com Inc. said in a statement the side of a delivery van as it departs an Amazon Warehouse
investigation. and are not Amazon em- that the way it reported location in Dedham, Mass.
"This theft did not go unno- ployees. pay to workers was clear. Associated Press
ticed by Amazon's drivers, The FTC said Amazon at first But the company said it this matter behind us." settlement will go back to
many of whom expressed promised workers that they "added additional clarity in The FTC said the money delivery drivers whose tips
anger and confusion to the would be paid $18 to $25 2019" and is "pleased to put Amazon is paying for the were taken.q