Wall Street Hangs Near Record          05/17 09:26

   U.S. stocks are drifting near their records Friday as Wall Street heads for 
the finish of another winning week.

   NEW YORK (AP) -- U.S. stocks are drifting near their records Friday as Wall 
Street heads for the finish of another winning week.

   The S&P 500 was basically flat in morning trading and on track for a fourth 
straight week of gains. The Dow Jones Industrial Average was up 59 points, or 
0.1%, a day after briefly topping the 40,000 level for the first time. The 
Nasdaq composite was virtually unchanged, as of 10:05 a.m. Eastern time.

   Despite the placid movements for indexes, some feverish action was roiling 
underneath. Reddit jumped 15.5% after announcing a partnership where OpenAI 
will bring the social-media company's content to ChatGPT and become an 
advertising partner, among other things. Wall Street's frenzy around 
artificial-intelligence technology has continued to build despite some warnings 
of a potential bubble.

   On the losing end was GameStop, which gave back more of its massive gains 
won at the start of the week.

   GameStop dropped 25.4% after it said it expects to report a loss of $27 
million to $37 million for the three months through May 4. It also said it 
could sell up to 45 million shares of stock in order to raise cash.

   Such moves can dilute the holdings of current shareholders, and it follows a 
similar move by AMC Entertainment. After its stock price also got caught up in 
a rocket ride, the movie-theater chain said earlier this week it would issue 
nearly 23.3 million shares of stock to wipe out some debt. Much of the whipsaw 
action for it and GameStop was more the result of enthusiasm among investors 
than any announcement that would change the companies' profit prospects.

   Not all of them were necessarily smaller-pocketed investors. Renaissance 
Technologies, the hedge fund founded by pioneering investor Jim Simons, bought 
shares of both GameStop and AMC Entertainment before the end of the first 
quarter, which ended March 31.

   Elsewhere in financial markets, Treasury yields were holding relatively 
steady, and stock indexes around the world were mixed.

   This week has been a good one for markets broadly after a report rekindled 
hopes that inflation is finally heading back in the right direction after its 
discouraging start to the year. That in turn has revived hopes for the Federal 
Reserve to cut its main interest rate at least once this year.

   The federal funds rate is sitting at its highest level in more than two 
decades, and a cut would goose investment prices and remove some of the 
downward pressure on the economy.

   The hope is that the Fed can pull off the balancing act of slowing the 
economy enough through high interest rates to stamp out high inflation but not 
so much that it causes a bad recession.

   Of course, now that many traders are betting on the Fed cutting rates two 
times this year or more, some economists are cautioning optimism may be going 
too far. It's something that happens often on Wall Street.

   While data reports recently have been better than forecast, "better than 
expected doesn't mean good," economists at Bank of America wrote in a BofA 
Global Research report.

   Inflation is still higher than the Fed would like, and Bank of America's 
Michael Gapen still expects the Fed to hold its main interest rate steady until 
cutting in December.

   In the bond market, the yield on the 10-year Treasury rose to 4.39% from 
4.38% late Thursday. The two-year yield, which more closely tracks expectations 
for the Fed, edged down to 4.79% from 4.80%.

   In stock markets abroad, indexes jumped 1% in Shanghai and 0.9% in Hong Kong 
after China's central bank announced moves to bolster its struggling property 
market. It reduced required down payments for housing loans and cut interest 
rates for first and second home purchases, among other moves.

   Indexes fell in Seoul, Tokyo and across much of Europe.