Twitter’s much anticipated IPO climbed rapidly but couldn’t prevent a downturn in the major indexes. The Dow lost 152 points, the Nasdaq fell by 74, and the S&P 500 declined 23. Twenty-eight of the Dow’s 30 components lost ground, led by Disney (DIS), which lost 2.7%. Volume was heavy and declining issues outnumbered advancers by more than three to one on the NYSE. The prices of Treasuries strengthened while the price of gold futures declined by 0.71% to $1,308.50 an ounce. The price of crude oil on the New York Mercantile Exchange lost 0.63% to $94.20 a barrel.
Twitter set markets buzzing today as the social media phenomenon went public in a big initial public offering. The stock (TWTR) was priced at $26 a share on Wednesday evening and opened at $45.10 a share with the opening bell. The price at its highest point today was $50.09 and it closed at $44.90 for a gain of 73%. Markets were watching this IPO closely to see if Twitter could avoid the glitches that marked the IPO of Facebook 18 months ago. Everything seemed to go smoothly, although some Wall Streeters debated a pricing strategy in which Twitter left a lot of capital “on the table,” which refers to the difference between Twitter’s selling price of $26 and the closing price on the open market.
In Earnings News:
- Beazer Homes announced earnings improved from a loss of $2.82 a share one year ago to a profit of 38 cents a share in the latest quarter. New orders for the homebuilder increased by 7% as the housing market has improved and the company is putting behind it questions about its lending policies and accounting. The price of the shares (BZH) gained 6% in today’s session
- Wendy’s reported it reduced losses from 7 cents a share a year ago to less than one cent a share in the latest quarter. Revenue increased by almost 1% as the company introduced premium menu items such as its pretzel burger. The price of the shares (WEN) lost 11%.
In Other Business News:
- New claims for unemployment benefits fell last week by 9,000 to 336,000, according to the Labor Department. The four-week moving average of claims fell by 9,250 to 348,250. Both declines indicate that slow improvement in the labor market is back on track after the disruption of the government shutdown last month
- The European Central Bank cut its main interest rate from 0.5% to 0.25% in a move that caught economists and markets off guard. Observers believe the move was intended to boost the economy, which falling inflation rates suggest is struggling. The move also may signal that the ECB under President Mario Draghi will be more proactive than under previous leadership. Bond prices in Europe strengthened on the news
- The nation’s economy grew faster than expected in the third quarter, according to the Commerce Department. Gross domestic product (GDP), which is the broadest measure of the economy’s size, increased at an annual rate of 2.8% in the three months ending with September. GDP grew at a 2.5% rate in the previous quarter. Growth was driven by companies restocking shelves, but it was also marked by weakness in consumer spending.
Who are the people who think up “apps” and how do they come up with this stuff? Sometimes I imagine them as a giant room full of terrified parents dreaming up ways to make us all healthier, safer, and more dutiful people. Take, for instance, these apps I read about recently
- For Halloween last week, there was an app called “Track ‘n’ Treat,” which not only informed parents the exact location of their candy-seeking, little goblins, but also sent the parents alerts when the kids strayed outside designated “safe areas.” Similar apps are available for non-Halloween times of the year, of course, and the two differ pretty much only by the picture on the packaging. (I assume apps like these do not enable parents waiting for their children to listen to the phone conversations of foreign leaders, but I’m not certain.
- A Japanese company has come out with an app called “Zaim,” which is intended to us save money. The app goes on a user’s cell phone, which can then communicate with the user’s wallet, which is equipped with a tiny set of wheels. When the app is in “save” mode and the user reaches for the wallet, the wallet rolls away. If the user then lunges for the wallet and succeeds in catching it, the wallet yells, “Don’t touch me!” and “Help me!” And if the user persists, the app sends an email to the user’s mother warning her of the impending profligacy. (A wallet on wheels? Talk about a roll of bills.)
- Tired of your smartphone getting your attention with ringing bells or tinny music? An app called “Scentee” will soon alert you with an aroma. The app goes on the smartphone and works in tandem with an accessory that plugs into the antenna socket to produce smells like apple, mint, coffee, and cinnamon bun. Barbecue and baked potato aromas are in the works. Would those aromas get my attention? Probably not. I get those smells every time I walk through a commercial area. (The aroma of genuine Cuban cigars, trout streams, or well-oiled, precision machinery might get my attention. Better yet, try a house burning down.)