Wall Street languid as 'meme stock' frenzy hogs spotlight
NEW YORK (Reuters) – Wall Street stocks wavered near the starting line on Tuesday as a lack of clear market catalysts kept institutional investors on the sidelines, while retail traders kept the rally of so-called meme stocks alive.
All three major U.S. stock indexes were little changed, with the S&P and the Dow hovering within 1% of their record closing highs.
The tech-laded Nasdaq fared best, with Amazon.com Inc and Apple Inc providing the biggest boost.
The CBOE volatility index, a measure of investor anxiety, touched its lowest level in over a year.
“Investors are taking a break,” said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York. “There are no material news events to drive the market, data is coming in as expected and we’re sitting near all-time highs.”
“The market is likely to stay range-bound until earnings season cranks up in July,” Pursche added. “Barring unexpected events, I would expect stocks to move sideways for the next three to four weeks.”
Smallcaps, once again buoyed by the ongoing meme stock retail frenzy, were outperforming their larger counterparts.
Clover Health Investments seized top billing among meme stocks, surging 71.8%, the largest percentage gainer in the Nasdaq.
Other stocks whose recent explosive trading volumes have been attributed to social media buzz, including GameStop Corp, Bed Bath & Beyond Inc, Workhorse Group and others, were up between 6% and 19%.
“The Reddit retail mania is trading, not investing,” Pursche said. “And when you look at history, back to the ‘90s, when this was called ‘day trading,’ it often ends badly for them.”
Reports from the U.S. Labor Department and National Federation of Independent Business appeared to confirm a labor shortage even as demand roars back to life, which could put upward pressure on wages, a precursor to wider inflation.
Market participants look to Thursday’s consumer price index data for further clues regarding inflation, and how it could influence the Federal Reserve’s timetable for tightening its dovish monetary policy.
The Dow Jones Industrial Average fell 13.47 points, or 0.04%, to 34,616.77, the S&P 500 gained 0.46 points, or 0.01%, at 4,226.98 and the Nasdaq Composite added 25.61 points, or 0.18%, at 13,907.33.
Of the 11 major sectors in the S&P 500, consumer discretionary enjoyed the biggest percentage gain, and utilities were down most.
Sales of Tesla Inc’s China-made electric cars jumped in May by 29%, marking a 177% year-on-year increase, according to the China Passenger Car Association. The stock erased initial gains on the news and was last down 0.7%.
Boeing Co shares were boosted by Southwest Airlines’ announcement that it had ordered 34 new 737 MAX aircraft, but the planemaker’s shares pared gains to 0.1%.
GameStop, the company most closely associated with the Reddit-driven short squeeze phenomenon, is expected to report quarterly results after the bell.
Advancing issues outnumbered decliners on the NYSE by a 1.56-to-1 ratio; on Nasdaq, a 1.33-to-1 ratio favored advancers.
The S&P 500 posted 51 new 52-week highs and one new low; the Nasdaq Composite recorded 149 new highs and 11 new lows.
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