Dow surges as stocks recover from GameStop mania

Hedge funds on Wall Street are catching a break from the short squeeze that ensued after retail investors rapidly pushed up the share price of GameStop (GME), AMC (AMC) and other heavily shorted stocks last week. Investors who had shorted those stocks — betting the prices would fall — lost billions of dollars when the share prices skyrocketed last week, driven up by an army of amateur traders on Reddit. Hedge fund Melvin Capital needed a $2.75 billion bailout to make ends meet. The fallout of the Reddit frenzy weighed on overall market sentiment last week, as Wall Street sold stocks to make up for their short-bet losses.

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