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Wall Street Opens Lower on Crypto Jitters; Dow Flat

Stock Markets1 hour ago (May 17, 2021 09:46AM ET)

(C) Reuters.

By Geoffrey Smith — U.S. stocks opened the week mostly lower, against a background of concern that the weakness seen in crypto assets over the weekend could herald trouble for other high-volatility, speculative assets.

By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was down 3 points – effectively flat – at 34,379 points, while the S&P 500 was down 0..2% and the Nasdaq Composite was down 0.4%.

The cautious start to the week came amid heavy losses in most cryptocurrencies after Tesla (NASDAQ:TSLA) CEO founder Elon Musk repeated his criticism of Bitcoin, while still asserting that his company hasn’t sold any of the Bitcoin it bought earlier in the year. Tesla’s bottom line in the first quarter was helped not least by a $100 million unrealized gains on its holdings of crypto assets. Tesla stock fell 1.5%.

Proxies for cryptocurrency exposure were also struggling in early trade. Coinbase Global (NASDAQ:COIN),. which operates the world’s biggest cryptocurrency exchange, fell 7.4%, going below the reference price of $250 at which it went public through a direct listing last month. Microstrategy (NASDAQ:MSTR), a company that has reinvented itself as a holding company for Bitcoin. fell 7.4% to its lowest since December. And shares in payments company Square (NYSE:SQ), which derives most of its revenue from processing Bitcoin transactions, fell 4.2% as the market reacted badly to news of a $2 billion debt offering.

The morning’s big winners were Discovery (NASDAQ:DISCA) Communications (NASDAQ:DISCB) stock and AT&T (NYSE:T) stock, which rose 16% and 4.0% respectively after the two decided to combine their media assets in a new company. The deal comes only a few weeks after a sharp fall in Discovery’s share price as the collapse of Bill Hwang’s Archegos Capital Management forced its prime brokers to dump the stock on the market.

Other companies in the video streaming space were hit by the news, which not only presages more focused competition but also attached a relatively sober valuation to the new streaming giant, which will include HBO Max, Warner Bros and Discovery’s nature, cooking and home renovation programs. Netflix (NASDAQ:NFLX) stock was down 1.0%, while Walt Disney (NYSE:DIS) stock was down 1.6%. Both companies disappointed analysts with their first-quarter subscriber numbers in recent weeks. Comcast (NASDAQ:CMCSA), the owner of NBC’s Peacock streaming service, was down 2.1%.

Elsewhere, Airbnb (NASDAQ:ABNB) stock fell 6.3% to a new low for 2021 as the lockup on existing shareholders expired. The room-sharing company’s first-quarter figures last week had suggested it may struggle to capitalize on the expected rebound in tourism and business travel this year due to a shortage of hosts (and massive spare capacity in the hotel sector).

Wall Street Opens Lower on Crypto Jitters; Dow Flat

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