Stock market today: Stocks pull back from records after Dow touches 40,000 for first time

Stocks pull back from records

Disney-Fox-Warner Bros. sports streaming service reveals name: Venu Sports

Stocks take breather after Dow touches $40K

30-year mortgage rate dips for second consecutive week

• GameStop stock tanks 25% as meme sell-off continues

  GameStop stock (GME) fell as much as 25% Thursday as the meme rally continues to fizzle. Shares of the video game retailer slid about 18% in the prior session after gaining more than 180% over a two-day span earlier this week.

  Shares of theater chain AMC (AMC) also fell 14% Thursday in a continuation of Wednesday’s sell-off.

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  Heavily shorted stocks were part of a monster rally that lasted Monday and Tuesday after the re-emergence of Keith Gill, also known as “Roaring Kitty,” whose bull case on GameStop ignited a meme stock rally back in 2021.
• Housing stocks slide after data shows April housing starts fell from prior year

  Housing stocks slid Wednesday morning on the heels of fresh government data signaling a weak recovery in new residential construction.

  The SPDR S&P Homebuilders ETF (XHB) was down 1% while D.R. Horton, Inc. (DHI), the biggest US homebuilder, fell by nearly 2%, and Lennar (LEN) and Toll Brothers (TOL) dragged by 2% during morning trading.

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  Construction for single-family and multifamily homes modestly rebounded in April from the prior month but was down year over year and was lower than anticipated, as rising mortgage rates dampened housing activity.

  Privately-owned housing starts in April were at a seasonally adjusted annual rate of 1.36 million, up 5.7% from March’s revised rate but down 0.6% from the year-earlier period, according to data from the Census Bureau released Thursday. Economists surveyed by Bloomberg were expecting a 1.42 million rate.

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  “The recovery wasn’t as strong as we had anticipated, which potentially casts some doubt on our above-consensus forecast for homebuilding,” Thomas Ryan, an economist at Capital Economics, wrote in a note following the release.

  This comes as homebuilders aren’t feeling too confident about the housing market as mortgage rates have stayed above 7%. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) fell to 45 in May, down six points from April’s figure, marking the first decline since November 2023. Any number under 50 indicates that more builders view conditions as poor rather than good.

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  Despite the bleak expectations from builders, Ryan anticipates that single-family starts could climb to 1.11 million this year “as homebuilders capitalize on the lack of second-hand homes on the market, which has shifted demand to newbuilds.”

  However, some of that strength could be offset by weaker movement in multifamily starts, potentially leaving total housing starts at 1.43 million by the end of the year, Ryan said.

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  Dow touches 40,000 level for first time

  The Dow Jones Industrial Average (^DJI) touched the 40,000 level Thursday for the first time following a record-setting rally in the prior session.

  The blue-chip index gained more than 80 points while the S&P 500 (^GSPC) also rose after closing above 5,300 for the first time on Wednesday. The tech-heavy Nasdaq Composite (IXIC) inched higher.

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  The gains come amid increasing expectations that the Federal Reserve will cut rates in September following the latest Consumer Price Index print which showed signs of cooling inflation.
• Bitcoin hovers at $66,000 level

  Bitcoin (BTC-USD) extended gains Thursday to hover around $66,000.

  The token gained more than 7% on Wednesday following a cooler-than-expected inflation print.

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  Investors anticipate the Federal Reserve will go ahead with rate cuts this year.
• Just off-air with Walmart’s CFO

  I just got off the Yahoo Finance set following a post-earnings chat with Walmart (WMT) CFO John David Rainey.

  A couple of quick takeaways:

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  • Rainey told us he sees deflation in certain product categories, not just disinflation.
  • Sales in May are off to a solid start.
  • Investors are seeing the benefits of investments in same-day delivery and buy-online, pick-up-in-store technology.

  Yahoo Finance’s data master, Jared Blikre just flagged that Walmart has crossed the $500 billion market cap level.

  Stocks regroup near record highs as Dow eyes 40,000 level

  US stocks were little changed at the market open Thursday after a record-setting rally in the prior session.

  The S&P 500 (^GSPC) opened near the flatline after closing above 5,300 for the first time on Wednesday. The Dow Jones Industrial Average (^DJI) and the tech-heavy Nasdaq Composite (IXIC) were also little changed.

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  All three major gauges ended Wednesday at all-time highs, leaving the Dow less than 100 points short of surpassing 40,000.

  Cooling inflation data released on Wednesday spurred bets for a Federal Reserve rate cut in September.

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  Meanwhile, Walmart (WMT) posted better-than-expected earnings. The retail giant attracted more higher-income customers, and e-commerce sales jumped for its flagship Walmart stores and Sam’s Club.
• Freakishly strong quarter out of Walmart

  This quarter out of Walmart (WMT) is a monster!

  I had sell-side coverage on the company for a decade, but I have never seen a performance like this before — aat a time in which consumers and businesses are still feeling the bite of inflation.

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  A few rapid-fire highlights ahead of my interview with Walmart’s CFO John David Rainey, which is airing around 9:15 a.m. ET on Yahoo Finance:

  • Gross profit margins are up in all segments. Impressive.
  • E-commerce sales by division: Walmart US +22%; International +19%; Sam’s Club +18%.
  • Full-year guidance was raised, but it feels conservative after this quarter..

    The never-ending AI talk

    I was driving into work today and caught an interview with the CEO of an overseas company that just reported earnings. The CEO got two questions in a row on artificial intelligence.

    It sounded like they barely knew what AI was and hadn’t visited the R&D department in a while. But therein lies the problem with this crop of AI: Most leaders of public companies don’t truly understand it at all. And that’s a risk to investors.

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    Despite the lack of deep knowledge on the topic, that isn’t stopping CEOs from blowing hot air on AI on earnings calls! Goldman Sachs pointed out today in a new note that 41% of S&P 500 companies have mentioned AI on first quarter earnings calls, up from 23% a year ago.