Arab Today, arab today twitter ipo highlights bumpy week for us stocks
Last Updated : GMT 04:36:09
Arab Today, arab today
Arab Today, arab today

Twitter IPO highlights bumpy week for US stocks

Arab Today, arab today

Arab Today, arab today Twitter IPO highlights bumpy week for US stocks

New York - AFP

Twitter held center stage on Wall Street in a week of rocky trade that ultimately held up against sell-offs of bubbly tech shares to produce a new Dow record. Twitter's long-awaited IPO dazzled the market as the company jacked up its first offer price by one-third to answer demand, only to see the shares still rocket almost 73 percent on the opening day, and largely hold up Friday. The markets overall went in the opposite direction Thursday, yet rebounded 24 hours later buoyed by strong economic data, despite the suggestion that it could spell earlier policy tightening by the Federal Reserve. The Dow Jones Industrial Average finished the week at a new high of 15,761.78, up 0.9 percent for the period. The S&P 500 ended a bare point below its record at 1,770.61, for a gain of 0.5 percent in the week. The Nasdaq meanwhile struggled on the sell-off of tech stocks Tesla and Facebook -- with some investors rotating into Twitter -- to lose 0.1 percent overall at 3,919.23. Twitter, the micro-messaging platform used by more than 230 million people and companies, captured the market's attention with its initial public offer. The largest of a growing flood of IPOs taking advantage of easy investor cash, the company originally proposed an issue price of $17-$20. But as demand for the 70 million shares soared, it punched the price up to $23-$25 and then finally $26, collecting $1.8 billion. When they hit the New York Stock Exchange on Thursday, the shares immediately jumped as high as $50 before finishing at $44.90, valuing the still profit-less company above $24 billion. On Friday the shares slipped but were still at a respectable $41.65. The week was also marked by a mixed bag of quarterly earnings results: gaining on ositive results were JC Penney, Transocean, Disney, Time Warner, and CVS; while disappointments came from chipmaker Qualcomm, Whole Foods Market, Tesla, Chesapeake Energy, and Hertz. The biggest contrast to Twitter was struggling Blackberry, which plunged on Monday on the news that it would not be sold. With its fate still in question, it lost 15.6 percent for the week. The markets took in stride two strong economic reports -- on third quarter growth and job creation in October -- that months earlier would have sent shivers through trade as harbingers of tightening by the Federal Reserve. On Thursday the government said the US economy expanded at a 2.8 percent pace in the third quarter, much faster than expected. And the jobs report that followed a day later showed 204,000 net new posts created last month, double what was expected even despite the early-October government shutdown. Most analysts said the data could bring the Federal Reserve back to weighing a first cut to its stimulus program in its December meeting, after putting the move off in September and again in October. Bond yields rose in reaction, but instead of falling, markets added more than one percent Friday. Hugh Johnson of Hugh Johnson Advisors said Wall Street hasn't liked good numbers because they foretell tighter monetary conditions and higher interest rates. However, he told MarketWatch: "Over the long haul that's probably good news for stocks. There's no reason to sell off, but there's a reason to be cautious about the economy." Nomura Global Economics said the positive data from the week backs a view that American businesses are getting more confident about growth. "Today's employment report, in particular, the strength of payroll employment in the last three months, is another significant indication that more robust business sentiment is generating stronger economic activity," they said in a client note. Even so, Nomura said, it does not expect the Fed to act to cut its stimulus until January.

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