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Dow falls 132 points despite solid jobs data, wild trading in meme stocks continues

Tiger Newspress2021-06-03

U.S. stocks fell on Thursday as the market continued to struggle to reach a new all-time high amid heightened speculative trading activity, while investors shrugged off better-than-expected labor market data.

The Dow Jones Industrial Average slipped 132 points. The S&P 500 declined 0.5% and the tech-heavy Nasdaq Composite shed 0.8%.

The benchmark S&P 500 sits about 1% from its all-time high reached earlier last month, but it has been stuck around these levels for about the last two weeks. The S&P 500 is up 11% this year so far.

Stocks that have run up in anticipation of the economy reopening this year were weak. Marriott, Carnival and Gap all traded in the red.

Shares of General Motors rose 3% after the company said it expects its results for the first half of 2021 to be “significantly better” than its prior guidance.

Most of the early market action centered on meme stock and theater chain AMC Entertainment. The stock was up as much as 20% in premarket trading Thursday after practically doubling in the prior session. AMC later wiped out gains and fell 10% after the movie theater chain said it may offer and sell from time to time up to 11.55 million shares of its Class A common stock.

Another meme stock BlackBerry rallied 27% on Thursday, bringing its week-to-date gains to about 90%.

Reminiscent of what occurred earlier this year, retail traders rallying together on Reddit have triggered a short squeeze in the stock. On Wednesday, short-sellers betting against the stock lost $2.8 billion as the shares surged, according to S3 Partners. That brings their year-to-date losses to more than $5 billion, according to S3. Short sellers are forced to buy back the stock to cut their losses when it keeps rallying like this.

The meme stock bubble in GameStop earlier this year weighed on the market a bit as investors worried it meant too much speculative activity was in the stock market. As losses in hedge funds betting against the stock mounted, worries increased about a pullback in risk-taking across Wall Street that could hit the overall market. AMC's latest surge did not appear to be causing similar concerns so far, but that could change if the stock keeps going higher and triggers similar moves in other stocks.

On the date front, private job growth for May accelerated at its fastest pace in nearly a year as companies hired nearly a million workers, according to a report Thursday from payroll processing firm ADP.

Total hires came to 978,000 for the month, a big jump from April’s 654,000 and the largest gain since June 2020. Economists surveyed by Dow Jones had been looking for 680,000.

Meanwhile, the latest jobless claims data came in slightly above estimates. First-time claims for unemployment benefits for the week ended May 29 totaled 385,000, versus a Dow Jones estimate of 393,000.

The market may be on hold before the release of the jobs report Friday, which is likely to show an additional 671,000 nonfarm payrolls in May, according to economists polled by Dow Jones. The economy added 266,000 jobs in April.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Comment37

  • andrew123
    ·2021-06-04
     When mkt run ahead whether good news or bad , mkt will correct as usual. Like n comment. 
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    • Tan123
      comment
      2021-06-04
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  • replaygoh
    ·2021-06-04
    bloody thursday
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  • phily
    ·2021-06-04
    Buy on rumour , sell on news
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  • edgewise
    ·2021-06-03
    Why drop when news is good?
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    • edgewise
      I see
      2021-06-04
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    • andrew123
      mkt price if forward looking. buy on expectation n sell on news. drop will be worst if news is worse than mkt exoectation
      2021-06-04
      Reply
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  • Whlaing
    ·2021-06-03
    Pleas like and comment!!
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  • Ompit
    ·2021-06-03
    Hi I am leaving comments now
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  • Ompit
    ·2021-06-03
    Hi I am leaving comments now
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  • Apple888
    ·2021-06-03
    [Speechless] 
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  • Natdns
    ·2021-06-03
    Like 
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  • SingYourLife
    ·2021-06-03
    U want jobs or get fzzking rich??? Buy BB now!! Pls comment and like
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    • Targarean
      Bought ??
      2021-06-03
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    • SingYourLife
      Yeah let go apes
      2021-06-03
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  • Deonc
    ·2021-06-03
    Ok
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  • Skang2
    ·2021-06-03
    [Cry] 
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  • AlphaSpiker
    ·2021-06-03
    Buy on DIPS[開心] [開心] [開心] 
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    • SingYourLife
      Yup to the moon!!
      2021-06-03
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    • JY_02222
      Cool
      2021-06-03
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  • dannytayjy
    ·2021-06-03
    Please like and comment thanks!
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    • JKJKJK
      Pls reply to this comment.
      2021-06-03
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    • ShanRan
      sure,
      2021-06-03
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  • tralala
    ·2021-06-03
    [Cry] 
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  • Khoogl
    ·2021-06-03
    Like
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  • Sam51
    ·2021-06-03
    Pls like and comment tq 
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    • JKJKJK
      Pls reply to this comment.
      2021-06-03
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  • JohanS
    ·2021-06-03
    Dip and scoop, dip and scoop 
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  • Raymondteo
    ·2021-06-03
    Like and comment pls
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  • jehhme
    ·2021-06-03
    nice
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    • jehhme
      hi
      2021-06-03
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