AP – The Dow Jones Industrial Average finished a day above the 40,000 level for the first time on Friday as United States (US) stock indexes drifted around their records while closing out their latest winning week.
The Dow rose 134.21 points, or 0.3 per cent, 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 US 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 per cent, to 5,303.27.
It finished just 0.1 per cent 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 per cent, to 16,685.97.
Despite the placid movements for indexes, some feverish action was roiling underneath.
Reddit jumped 10 per cent 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 per cent to trim its gain for the week to 27.2 per cent after it said it expects to report a loss of up to USD37 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-theatre 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.
