Stocks post biggest drop in three months

Wild trading in heavily shorted stocks and a slump in Boeing slammed Wall Street Wednesday, with stocks suffering their biggest loss in three months. Selling accelerated after the Federal Reserve left interest rates unchanged and chairman Jerome Powell pointed to the headwinds facing the economy.

The Dow plunged 633 points or 2%. The selling was even worse for the S&P 500 and Nasdaq – which both dropped more than 2-and-a-half percent Wednesday.

Adding to the market turmoil: amateur retail investors piled into shares of video game retailer GameStop and cinema operator AMC Entertainment, pushing up their shares and forcing short-sellers like Citron to ditch their losing bets.

Gerber Kawasaki COO Danilo Kawasaki says regulators need to step in.

“On one side, I think that this impacts the integrity of the market, and we need confidence from investors to maintain an orderly market. But on the other side, my colleagues here are saying that this is an opportunity for the small guy, for the little guy, to kind of stick it to the big guys.”

Other big movers Wednesday– Boeing. Shares declined almost 4%. The airplane manufacturer took a huge $6.5 billion charge on its new wide-body twin-engine 777X jet due to the health crisis and the aftermath of the safety issues over its narrow-body 737 MAX.

After the markets closed, shares of two Silicon Valley tech titans rose modestly after posting strong results.

Apple’s quarterly profit breezed past estimates. New 5G iPhones helped push handset revenue to a new record and sparked a 57% rise in China sales.

Facebook’s quarterly profit and revenue crushed analysts estimates. Increased ad spending by businesses lifted the social networking company’s top line.

But Tesla shares slid after hours. The electric car maker’s profit came in short of Wall Street’s targets.