Stock Market News: Dow Opens Up

view original post

GameStop stock briefly doubled in Monday morning trading after Reddit hero Keith Gill posted on his Roaring Kitty X account for the first time since 2021. Other meme stocks joined in the party, but the big three U.S. indexes were mostly unaffected.

Gill, who made a name for himself by posting bullish research and screenshots of bets on GameStop stock in 2020 and 2021 when much of Wall Street was counting on its decline, posted a cartoon of a man leaning forward in a red chair. The meme is used to communicate that someone who was leaning back while playing is taking it more seriously and is “locked in.”

GameStop stock was up nearly 100% in recent trading to $34.87 but was sinking from such levels shortly after 10 a.m. ET. AMC Entertainment stock was up more than 11%, while KOSS stock was up 35%.

Meme stocks took off during a time in the market where near-zero interest rates seemed to encourage speculative and hype-based traders on social media sites like Reddit. They’ve struggled since the Federal Reserve started raising interest rates. The idea that meme stocks are back could lead some to worry about the health of the market’s rally, and whether things are getting too frothy.

“Anyone who is bearish will undoubtedly point to this as a sign of froth in the market, but I think the GameStop (GME) situation is cordoned off to a specific subset of – I use the word loosely – investors/traders,” Bespoke Investment Group co-founder Paul Hickey told Barron’s.

The S&P 500 was up a modest 0.1% on Monday. The Dow Jones Industrial Average was up 0.2%. The Nasdaq Composite was up 0.2%.

“Outside of the roaring kitty part of the market, sentiment is still not nearly as extreme and while it’s leaning more to the bullish side of neutral, but it doesn’t appear as though there is a lot of conviction as investors have a loose threshold before they turn bearish again,” Hickey says.

When the stock was at $36.70, GameStop short sellers were down $1.286 billion on paper, according to Ortex Media.