Dow jumps 600 as GameStop frenzy recedes
Stock markets jumped early Tuesday as the social media-driven frenzy over stocks such as GameStop receded.
By midday, the Dow Jones Industrial Average was trading up 600 points, or 2 percent. It closed up 476 points, or or 1.6 percent, while the S&P 500 rose 52 points, or 1.4 percent.
Last week, markets were unnerved after retail traders organized on social media platforms such as Reddit homed in on unlikely stocks including GameStop and AMC, driving their prices through the roof against all odds, and giving the companies massive market valuations.
The phenomenon, which squeezed short-selling hedge funds, raised questions about market manipulation and consumer protection, gaining the attention of the White House, Treasury Department and Securities and Exchange Commission.
GameStop, which started the year below $20 a share and saw its price peak above $400 last week, fell to $120 on Tuesday. Its second day of declines may signal an end to the recent manic rally.
Updated at 4:09 p.m.
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