A heart is displayed on the door of a gift shop across from the New York Stock Exchange on Thursday, May 16, 2024, in New York. The Dow Jones Industrial Average briefly topped the 40,000 level on Thursday for the first time but ended 0.1% lower. (AP Photo/Peter Morgan)
A heart is displayed on the door of a gift shop across from the New York Stock Exchange on Thursday, May 16, 2024, in New York. The Dow Jones Industrial Average briefly topped the 40,000 level on Thursday for the first time but ended 0.1% lower. (AP Photo/Peter Morgan)
NEW YORK (AP) — U.S. stocks drifted to a mostly higher close on Wall Street, marking their fourth winning week in a row. The S&P 500 rose 0.1% Friday. The Dow Jones Industrial Average rose 0.3% to close above 40,000 points for the first time. It briefly traded above that level a day earlier. The Nasdaq composite fell 0.1%. GameStop sank, giving back more of its huge gains from early in the week, after predicting a loss of up to $37 million for its latest quarter and announcing that it would sell up to 45 million shares of stock to raise cash.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — U.S. stocks are drifting near their records Friday as Wall Street heads for the finish of another winning week.
The S&P 500 fell 0.1% in afternoon trading and remains on track for a fourth straight week of gains. The Dow Jones Industrial Average was up 45 points, or 0.1%, a day after briefly for the first time. The Nasdaq composite fell 0.4% as of 2:33 p.m. Eastern time.
Despite the placid movements for indexes, some feverish action was roiling underneath. Reddit jumped 9.1% after announcing a will bring the social-media company’s content to ChatGPT and become an advertising partner, among other things. Wall Street’s has continued to build despite some warnings of a potential bubble.
On the losing end was GameStop, which gave back more of its won at the start of the week.
GameStop dropped 23.4% after it said it expects to report a loss of $27 million to $37 million for the three months through May 4. It also said it could sell up to 45 million shares of stock in order to raise cash.
Such moves can dilute the holdings of current shareholders, and it follows a similar move by AMC Entertainment. After its stock price also got caught up in a rocket ride, the movie-theater chain said earlier this week it would issue nearly 23.3 million shares of stock to wipe out some debt. Much of the whipsaw action for it and GameStop was more the result of enthusiasm among investors than any announcement that would change the companies’ profit prospects.
Not all of them were necessarily smaller-pocketed investors. Renaissance Technologies, the hedge fund founded by , bought shares of both GameStop and AMC Entertainment , which ended March 31.
Elsewhere in financial markets, Treasury yields were holding relatively steady, and stock indexes around the world were mixed.
This week has been a good one for markets broadly after a report rekindled hopes that in the right direction after its discouraging start to the year. That in turn has revived hopes for the Federal Reserve to at least once this year.
The federal funds rate is sitting at its highest level in more than two decades, and a cut would goose investment prices and remove some of the downward pressure on the economy.
The hope is that the Fed can pull off the balancing act of slowing the economy enough through high interest rates to stamp out high inflation but not so much that it causes a bad recession.
Of course, now that many traders are betting on the Fed cutting rates two times this year or more, some economists are cautioning optimism may be going too far. It’s something that .
While data reports recently have been better than forecast, “better than expected doesn’t mean good,” economists at Bank of America wrote in a BofA Global Research report.
Inflation is still higher than the Fed would like, and Bank of America’s Michael Gapen still expects the Fed to hold its main interest rate steady until cutting in December.
In the bond market, the yield on the 10-year Treasury rose to 4.42% from 4.38% late Thursday. The two-year yield, which more closely tracks expectations for the Fed, edged up to 4.82% from 4.80%.
In stock markets abroad, indexes jumped 1% in Shanghai and 0.9% in Hong Kong after China’s central bank announced moves to bolster its struggling property market. It and cut interest rates for first and second home purchases, among other moves.
Indexes fell in Seoul, Tokyo and across much of Europe.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
