What’s News in Markets: Dow 40K, Meme Stocks, Walmart Growing
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What is the main topic discussed in this episode?
This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
Hey, listeners, it's Saturday, May 18th. I'm Francesca Fontana for The Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. 40,000.
How did the Dow hit 40,000 and which news pushed it higher?
All three major indexes rallied to new heights during the week, but that was the big highlight. The Dow crossed that milestone for the first time during Thursday's trading session before ending just below it. A jump in Walmart shares on Thursday helped push the Dow higher, but more on that later. And on Friday, the Dow made it, closing above 40,000. Time to bring out those commemorative baseball hats. Not only do I host this podcast, but I am also an avid podcast listener. I'm sure many of you are as well, so many of you are also used to hearing hosts read out the good old, this podcast was brought to you by Squarespace. If you don't hear that ad all the time like I do, I can fill you in. It's a website designing platform, and its stock was making big moves this week.
Squarespace said on Monday that it had agreed to a $6.6 billion all-cash takeover by a private equity firm, Permira. This deal is interesting because it's part of this flurry of mega deals we've been seeing, suggesting a possible revival in M&A activity this year — mergers and acquisitions. Under the terms of the deal, Squarespace said its shareholders will receive $44 in cash for each share they own, which is a 15% premium to the previous Friday's closing price. Shareholders, it seemed, were quite pleased with the news.
Why did Squarespace shares surge after the $6.6B Permira takeover announcement?
The stock jumped 13% Monday and held onto those gains the rest of the week. Meme stock mania came back with a vengeance this week. When I saw GameStop stock moves, I was asking myself, you know, what year is it? Because it's trading like it's 2021. If you missed it, the video game retailer experienced a fresh rally triggered by the reemergence of ex-user Roaring Kitty, aka Keith Gill. He's the one who helped steer the world's attention to GameStop and helped send it to the moon, as they say. His social media had been inactive for years, but he tweeted, sorry, made a post on X last weekend, and the post wasn't even about GameStop or any stock. But that did not matter on Monday. GameStop shares more than doubled at their intraday jump Monday and closed up a whopping 74%.
The stock followed that up with a 60% jump on Tuesday. All in all, the company added roughly $9.6 billion in market value in two days.
What does Squarespace’s $44-per-share deal signal about M&A activity?
So yeah, GameStop soared up to the moon but started coming back down to earth later in the week. The stock ended up notching a weekly gain of nearly 30%. Now let's roll back to Walmart. What's news, listeners? You've already heard a bit about Walmart's earnings report this week and how it's competing with Amazon. The earnings cliff notes? They were good. On Thursday, Walmart posted a rise in sales and raised its outlook for the year. What's interesting is we're also getting a sense of what to watch for on the horizon. Executives are now focused on expanding beyond the tried-and-true groceries and everyday necessities. For example, its $2.3 billion deal to buy TV maker Vizio, which is a bid to bring in ad sales as a new revenue source.
The company is also cutting costs. WSJ reported Tuesday that Walmart told employees it's cutting hundreds of corporate jobs.
Why did GameStop rally like 2021 and who is Roaring Kitty?
The stock moved slightly lower early in the week, including a nearly 1% loss on Tuesday, but Walmart more than made up for it on Thursday, jumping 7% and helping propel the Dow higher, before finishing the week with a gain of 6.9%. And now you know what's news in markets this week. You can read about more stocks that moved on the week's news in The Score, my column in the Wall Street Journal's Exchange section.
How did Walmart’s earnings and strategic moves influence its stock this week?
I'm Francesca Fontana. Have a great weekend and see you next Saturday.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–0:32
2
How did the Dow hit 40,000 and which news pushed it higher?
0:32–1:48
3
Why did Squarespace shares surge after the $6.6B Permira takeover announcement?
1:48–2:48
4
What does Squarespace’s $44-per-share deal signal about M&A activity?
2:48–3:38
5
Why did GameStop rally like 2021 and who is Roaring Kitty?
3:38–4:02
6
How did Walmart’s earnings and strategic moves influence its stock this week?
4:02–4:18
7
What are Walmart’s growth plans (Vizio deal, cost cuts) and market reaction?
4:18–4:26
Speakers
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