US stocks tumble despite Twitter IPO, strong US GDP
Specialist Glenn Carell calls out prices before Twitter begins trading during its IPO, on the floor of the New York Stock Exchange, Thursday, Nov. 7, 2013. US stocks Thursday tumbled despite a successful launch of trading in Twitter stock and report on US economic growth that bested expectations by a wide margin. AP PHOTO/RICHARD DREW
NEW YORK CITY—US stocks Thursday tumbled despite a successful launch of trading in Twitter stock and report on US economic growth that bested expectations by a wide margin.
The Dow Jones Industrial Average lost 152.90 (0.97 percent) to 15,593.98.
The broad-based S&P 500 gave up 23.34 (1.32 percent) at 1,747.15, while the tech-rich Nasdaq Composite Index sank 74.61 (1.90 percent) to 3,857.33.
The retreat came as Twitter shares vaulted more than 72 percent above the $26 IPO price.
The shares soared as high as $50 before settling the day at $44.90, valuing the still-profitless social networking service at about $24 billion.
The Commerce Department said the US economy grew at an annual rate of 2.8 percent in the third quarter, well above the 1.9 percent projected by analysts.
Analysts said the strong headline number masked weakness in consumer spending and other areas.
Nevertheless, “the market is looking at it as a strong number,” said David Levy, portfolio manager at Kenjol Capital Management.
The market is wondering if the GDP report “pushes up the timetable” for the Federal Reserve to scale back its bond-buying program, Levy said.
Thursday’s losses come ahead of Friday’s monthly US jobs report. Expectations for jobs growth are low, but a surprisingly good report could persuade the market a Fed taper will come sooner, analysts said.
Netflix lost 2.6 percent despite announcing a deal with Walt Disney’s Marvel to bring several new superhero shows to the streaming Internet TV service. Netflix shares have risen more than three-fold in 2013.
Dow component Disney fell 2.7 percent ahead of its fiscal fourth quarter results release. After the market closed the entertainment giant turned in a $1.39 billion net profit, just beating forecasts.
Chip maker Qualcomm fell 3.8 percent after earnings of $1.05 per share trailed expectations by three cents.
Upscale supermarket chain Whole Food Market slumped 11.2 percent after slashing its 2014 forecast due to lower sales growth. The company now forecasts earnings of $1.65-$1.69, down from the previous range of $1.69-$1.72.
Struggling department-store chain J.C. Penney jumped 5.6 percent after reporting that same store sales increased 0.9 percent in October. An upbeat statement from the company reported “significant progress” in addressing the company’s challenges.
Drilling company Transocean shot up 7.0 percent after earnings of $1.37 per share exceeded expectations by 30 cents. Revenues rose nearly 7 percent.
Bond prices rose. The yield on the 10-year US Treasury slipped to 2.61 percent from 2.64 percent, while the 30-year dipped to 3.73 percent from 3.77 percent. Bond prices and yields move inversely.
