June 9 (UPI) — U.S. markets dipped on Wednesday while so-called “meme stocks” targeted by online traders fluctuated wildly.
The Dow Jones Industrial Average fell 152.68 points, or 0.44%, while the S&P 500 dropped 0.14% and the Nasdaq Composite slid 0.083% at the end of trading.
Some stocks targeted by the Reddit investing forum r/WallStreetBets received a boost Wednesday as Clean Energy Fuels rose 31.52% and WWE stock increased 10.89% after rising as much as 22% earlier in the day
Clover Health Investments, however, fell 23.61% after surging more than 85% on Wednesday and AMC Entertainment, one of the most high-profile meme stocks, fell 10.37%.
Maneesh Deshpande, global head of equity derivatives strategy at Barclays, said he doesn’t expect the recent activity surrounding meme stocks to affect the broader market as it did in January when traders targeted GameStop stock.
“Given the low risk of a broad contagion, we view the fallout of the recent short squeeze to be limited,” Deshpande said. “The current short squeeze is more localized probably because the number of stocks with high short interest has come down dramatically.”
AMC has risen more than 2,350% on the year and sold 11.55 million shares last week to raise more than $587.4 million, while offering a warning concerning the risk associated with investing.
The Securities and Exchange Commission on Monday said it was closely monitoring the movement of meme stocks.
“SEC staff continues to monitor the market in light of the ongoing volatility in certain stocks to determine if there have been any disruptions of the market, manipulative trading, or other misconduct,” the SEC said in a statement. “In addition, we will act to protect retail investors if violations of federal securities laws are found.”