Dow Jones Hits 40,000, Chinese Tech Stocks Jump To 15-Month Highs, Bloodbath On Meme Stocks: What's Driving Markets Thursday?

U.S. major stock indices climbed higher on Thursday morning, with the Dow Jones Industrial Average achieving a historic milestone by surpassing 40,000 points.

Blue-chip stocks are experiencing their thirteenth positive session out of the last fifteen, extending the bull market that commenced in October to a 24% rally.

The S&P 500 and the Nasdaq 100 both inched up by 0.1%, further updating their record highs, driven by soft economic data.

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For the week ending May 11, unemployment benefit claims fell by 10,000 to 222,000, although this remains the third-highest level for the year.

Industrial production was flat in April, missing expectations of a 0.1% increase, while manufacturing production dropped by 0.3% from the previous month, also falling short of market forecasts of a 0.1% growth.

Treasury yields hold broadly steady, while the U.S. dollar index (DXY) witnessed minor gains, up 0.1%.

Chinese stocks continued their positive momentum, with the KraneShares CSI China Internet ETF KWEB, tracking the nation’s tech stocks, up 1.8% and reaching its highest levels since mid-February 2023.

Notably, renowned ‘big short’ investor Michael Burry added Baidu Inc. BIDU to his hedge fund’s holdings and increased his stakes in JD.com Inc. JD and Alibaba Group Holdings Ltd. BABA, according to the latest 13F filing.

The bloodbath on meme stocks continued, while gold and Bitcoin BTC/USD both fell :

• GameStop Corp. GME down 21%, after a 19% drop on Wednesday.
• AMC Entertainment Holdings Inc. AMC fell 10%, after a 20% drop a day earlier
• Gold paused for a breather, down 0.3%, while copper fell 0.7% on track to snap a 5-day winning streak.
• Bitcoin fell 1.7%, after rising as much as 7.6% on Wednesday.

Energy And Commodities: Natural gas made headlines, with U.S. Henry Hub prices rising 4% to $2.375/MMBTu, up over 35% since the start of the month. The Energy Information Administration reported that U.S. utilities injected 70 billion cubic feet (bcf) of gas into storage during the week ending May 10, falling short of market expectations of a 76 bcf increase.

Thursday’s Performance In Major US Indices, ETFs

The SPDR S&P 500 ETF Trust SPY was flat at $529.80, the SPDR Dow Jones Industrial Average DIA rose 0.2% to $399.92 and the tech-heavy Invesco QQQ Trust QQQ was flat at $453.15, according to Benzinga Pro data. 

Sector-wise, the Consumer Staples Select Sector SPDR Fund XLP outperformed, up by 1.7%. The Materials Select Sector SPDR Fund XLB was the laggard, down 0.6%.

Thursday’s Stock Movers

• Walmart Inc. WMT rallied 6.5% on track for its strongest day in 6 months, after the company topped Street’s estimates on both revenue and earnings last quarter.
• Other stocks reacting to earnings were Deere & Co. DE down 4%, Advance Drainage Systems Inc. WMS down 3.4%, Dillards Inc. DDS down 1.4% and Under Armour Inc. UA down 0.6%.
• Chubb Limited CB rose over 4%, after Warren Buffett’s Berkshire Hathaway purchased 25.92 million shares of the stock.
• Coinbase Global Inc. COIN fell over 8%, as the cryptocurrency market saw broad-based drops.
• Large-cap companies reporting their earnings after the market close are Applied Materials Inc. AMAT, Copart Inc. CPRT and Take-Two Interactive Software Inc. TTWO.

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