<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=192888919167017&amp;ev=PageView&amp;noscript=1">
Sunday,  June 23 , 2024

Linkedin Pinterest
News / Business

Stock market today: Dow finishes above 40,000 to cap Wall Street’s latest winning week

By STAN CHOE, AP Business Writer
Published: May 17, 2024, 1:06pm

NEW YORK (AP) — The Dow Jones Industrial Average finished a day above the 40,000 level for the first time on Friday as U.S. stock indexes drifted around their records while closing out their latest winning week.

The Dow rose 134.21 points, or 0.3%, to 40,003.59, a day after briefly topping the 40,000 level for the first time. It and other indexes on Wall Street have been climbing since the autumn of 2022 as the U.S. economy and corporate profits have managed to hold up despite high inflation, the punishing effects of high interest rates and worries about a recession that seemed inevitable but hasn’t arrived.

The S&P 500, which is the much more important index for Wall Street and most retirement savers, added 6.17 points, or 0.1%, to 5,303.27. It finished just 0.1% shy of its record set on Wednesday and closed out a fourth straight week of gains. The Nasdaq composite slipped 12.35 points, or 0.1%, to 16,685.97.

Despite the placid movements for indexes, some feverish action was roiling underneath. Reddit jumped 10% after announcing a partnership where OpenAI will bring the social-media company’s content to ChatGPT and become an advertising partner, among other things. Wall Street’s frenzy around artificial-intelligence technology has continued to build despite some warnings of a potential bubble.

On the losing end were GameStop and AMC Entertainment, which gave back more of their massive gains from the beginning of the week.

GameStop dropped 19.7% to trim its gain for the week to 27.2% after it said it expects to report a loss of up 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 followed a similar move by AMC Entertainment. After the movie-theater chain’s stock price also got caught up in a rocket ride upward, AMC 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 due to enthusiasm among investors, not because of fundamental changes to their profit prospects. Not all of those were necessarily smaller-pocketed investors buying on their phones. Renaissance Technologies, the hedge fund founded by pioneering investor Jim Simons, revealed that it bought shares of both GameStop and AMC Entertainment before the end of March, though it may no longer still own them.

Morning Briefing Newsletter envelope icon
Get a rundown of the latest local and regional news every Mon-Fri morning.

Elsewhere in financial markets, Treasury yields ticked higher, and stock indexes around the world were mixed.

This week was a good one for markets broadly after a report rekindled hopes that inflation is finally heading back in the right direction after a discouraging start to the year. That in turn revived hopes for the Federal Reserve to cut its main interest rate 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 a growing percentage of traders are betting on the Fed cutting rates two times this year, if not more, some economists are cautioning the optimism may be going too far. It’s something that happens often on Wall Street.

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 4.41% 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 reduced required down payments for housing loans and cut interest rates for first and second home purchases, among other moves.

Indexes fell in Seoul, Tokyo and across much of Europe.