Dow falls 8.7 percent as US stocks face another rout

NEW YORK - Wall Street stocks were deep in the red early Thursday, resuming after a 15-minute suspension as the economic pain from the coronavirus deepens and widens.

About 25 minutes into trading, the Dow Jones Industrial Average was at 21,505.07, down more than 2,000 points or 8.7 percent.

The broad-based S&P 500 tumbled 8.1 percent to 2,519.43, while the tech-rich Nasdaq Composite Index shed 7.9 percent to 7,323.31.

Trading was suspended after losses hit seven percent on the S&P 500, a benchmark that triggers circuit breakers halting transactions to manage crises.

Anxiety was elevated a day after the Dow entered a bear market as the spread of the virus further crimped economic activity. 

The NBA suspended its professional basketball season after a player tested positive, while Carnival announced that its Princess cruise line would suspend service for 60 days.

The European Central Bank on Thursday followed other major central banks with a flurry of measures to cushion the impact of the coronavirus, including increased bond purchases and cheap loans to banks, but surprised observers by leaving key interest rates unchanged.

Stock losses were widespread, but the impact on major airlines was especially acute after US President Donald Trump announced a 30-day travel ban on European travelers. 

Both Delta Air Lines and United Airlines tumbled more than 10 percent, adding to losses in a bruising period for the industry.

source: news.abs-cbn.com

First vegan investment fund coming to New York Stock Exchange

NEW YORK -- An investment fund designed for animal rights advocates and environmentalists, the first of its kind according to financial experts, is set to begin trading on the New York Stock Exchange (NYSE) next month.

VEGN, as it will show on the NYSE's floor, enters the fray of hundreds of funds that consider environmental, social or governance (ESG) factors in their investment decisions but will be unique in going animal cruelty-free, experts said.

US assets under management that follow ESG principles have been surging, representing one in four dollars last year, up from one in five in 2016, according to The Forum for Sustainable and Responsible Investment, a Washington-based non-profit.

Holding such investments is a way to pressure companies to change their behavior in order not to miss investors, said Tensie Whelan, who heads the New York University's Center for Sustainable Business.

"It's an interesting offering because it's the only one of its kind," she said in a telephone interview.

VEGN, the ticker symbol for the exchange-traded fund (ETF), whose full name is US Vegan Climate Exchange Traded ETF, will exclude stocks among the 500 largest US companies that "rely on animal exploitation", said its creator Beyond Investing.

It will be listed on the NYSE starting on Sept. 10.

Selecting companies whose businesses do not test products on animals, or use animal-derived products, fossil fuels, plastic or agrochemicals, has meant tossing out 43 percent of the top 500 companies, said Claire Smith, the Switzerland-based chief executive of Beyond Investing.

The fund's portfolio guidelines mean it doesn't include many pharmaceuticals, materials and consumer-sector stocks, said Smith.

"Things like clothing, shoe manufacture ... (involve) so much animal products," she said.

Still, a market index of stocks that a parent company of Beyond Investing launched in June last year and that VEGN will track - meaning it will be used to guide what stocks go into the fund - has outperformed the market this year, said Smith, after "a little bit of underperformance last year."

Beyond Investing identifies companies that follow VEGN's criteria by researching their business models, regulations and internal policies, said Smith.

In a report published earlier this month the United Nations called for diets less reliant on meat in order to combat climate change and ensure enough food for all.

Animal Rebellion, a group inspired by Extinction Rebellion's non-violent civil disobedience climate activism, also is pushing for diets without meat.

Aniket Shah, a senior fellow at Columbia University's Center on Sustainable Investment in New York, said a challenge environmental, social and governance-focused funds have typically faced was small scale.

One of the largest ESG funds, run by Blackrock, has more than $1 billion in investment, a relatively small amount compared to mainstream funds, Shah said. 

source: news.abs-cbn.com

Levi's raises $623 million ahead of Wall Street comeback

NEW YORK -- US jeans company Levi Strauss & Co announced Wednesday strong pricing ahead of its Wall Street return, enabling it to raise a better-than-expected $623 million.

The iconic brand, which is set to begin trading Thursday on the New York Stock Exchange, said it would initially price at $17 a share, above the $14 to $16 per share range it had previously targeted.

Strong demand for the shares means the IPO will raise $623 million.

First founded in 1853 in San Francisco as a wholesale dry goods business, Levi's invented the blue jean 20 years later, a product that was initially worn by primarily by miners and cowboys before becoming ubiquitous in the 20th century.

The brand has had its ups and downs since in terms of its cultural relevance, but has been seen as again rising under Chief Executive Charles Bergh, who joined Levi's in September 2011 after a lengthy stint at Procter & Gamble.

Most recently, Levi's won attention when musical superstar Beyonce wore Levi's cutoff shorts in an April 2017 performance at the Coachella music festival, a point highlighted in the company's securities filing, which noted the garment was deemed the "ultimate Coachella clothing item" by People magazine.

"The Levi's brand epitomizes classic, authentic American style and effortless cool," the company said in its prospectus.

Levi's plans to use proceeds from the offering for general corporate purposes, as well as for potential acquisitions, the company said in the filing.

Thursday's marks Levi's return to the public markets after it exited in 1985 in a leveraged buyout, 14 years after it first went public.

source: news.abs-cbn.com

New York's 'Fearless Girl' to stare down the Stock Exchange

NEW YORK - The bronze statue of a little girl that became a tourism phenomenon by staring down Wall Street’s massive “Charging Bull” sculpture is to be moved to a nearby spot where its stern gaze will be on the male-dominated New York Stock Exchange, city officials said on Thursday.

“Fearless Girl,” whose message is for a bigger role for women in corporate America and whose appearance in lower Manhattan on the eve of International Women’s Day last year sparked a social media sensation, will be moved by the end of 2018, officials said.


“She is a powerful symbol of the need for change at the highest levels of corporate America — and she will become a durable part of our city’s civic life,” Mayor Bill de Blasio said in a statement.

Although the diminutive 50-inch (127-cm) statue was originally intended to be planted in front of the “Charging Bull” for only a week in March 2017, the city extended its stay by another 11 months after an outpouring of support.

The planned move, which officials said was prompted in part by traffic safety concerns, will place “Fearless Girl” in a pedestrian-only area at the corner of Wall and Broad Streets, the site of George Washington’s inauguration in 1789 as the country’s first president, where it will face the NYSE.

“We eagerly await the arrival of Fearless Girl to her fitting new home, standing her ground and training her unblinking eyes on our engine of progress and free enterprise,” NYSE President Thomas Farley said in a statement.

The statue was originally part of a gender diversity campaign by State Street Global Advisors, a subsidiary of State Street Corp, which said last year that 25 percent of the largest 3,000 U.S. companies have no female directors.

Since the appearance of “Fearless Girl,” more than 150 companies have added a woman to their boards, State Street Global Advisors President Cyrus Taraporevala said.

The firm has had its own gender-related issues, agreeing to pay $5 million last October to settle U.S. Labor Department allegations that it underpaid female and black executives. It also opted not to use its equity clout last year in seven of eight shareholder resolutions to enhance boardroom diversity.

“Fearless Girl” is not without detractors, including Arturo Di Modica, who objected to the placement in front of his “Charging Bull.”

Although city officials said they are looking into moving “Charging Bull” as well, Di Modica’s lawyer, Norman Siegel, said the sculptor would need to give his permission, and has yet to be contacted about it.

source: news.abs-cbn.com

Bitcoin futures launch sparks excitement, warnings

NEW YORK - Bitcoin will make its debut on a major exchange Sunday, a landmark for the cryptocurrency that has generated enthusiasm among some investors and more than a little anxiety from others.

The Cboe Futures Exchange in Chicago will open trading in bitcoin futures at 7 a.m. Monday (Manila time), a move that is expected to be followed a week later by a rival listing on Chicago Mercantile Exchange.

"Bitcoin bonanza takes hold of world markets," proclaimed the front page of the Times of London on Friday, reporting on the latest record price of the digital currency.

Among those cheering the launch are the Winklevoss twins, who have been called the first bitcoin billionaires. Critics include financial commentator Jim Cramer, who warns that prices could tumble once the new trading venues open the door to "short sellers," who bet on downward moves in assets.

The two launches were made possible after a key US regulator, the Commodities and Futures Trading Commission, gave the green light to the exchanges on December 1, while warning "of the potentially high level of volatility and risk in trading these contracts."

Anticipation of the first mainstream listings for the digital currency has been a catalyst for a sharp price increase in recent weeks. Bitcoin opened 2017 at around $1,000, surged past $10,000 for the first time last month and soared as high as $16,777 on Thursday before retreating somewhat.

The actual opening of the Cboe market, an electronic trading venue, is expected to be a low-key affair, lacking the pomp of an initial public offering, which is often marked by the new entrant ringing the bell of the New York Stock Exchange.

"There won't be any ceremony, no champagne," said a person close to the Cboe process.

"It's going to happen quietly, a switch flipping," the person added. "There are not going to be many people in the office."

GOING MAINSTREAM

The embrace by mainstream exchanges of bitcoin futures -- a type of derivative contract that allows trading based on bitcoin's movement, without taking ownership of the currency itself -- marks a sea change from the days when the digital currency was associated with drug dealing and other illicit activities.

Still, plenty of key figures in and around markets are taking a cautious approach to bitcoin, which has no central bank backing it, and no legal exchange rate.

The Futures Industry Association, which includes some of the world's biggest derivatives brokerages, criticized the CFTC's move in a letter to the regulator, saying contracts are being rushed through without properly weighing the risks.

"A more thorough and considered process would have allowed for a robust public discussion among clearing member firms, exchanges and clearing houses," the association said.

Several leading financial heavyweights are still studying bitcoin and not serving as financial intermediaries. This group includes JPMorgan Chase, Bank of America Merrill Lynch, Citigroup, Barclays, Morgan Stanley and Societe Generale, said people close to the matter.

Of the larger banks, only Goldman Sachs and ABN Amro are serving as intermediaries for the trades. That means most of the terrain will be dominated by smaller entities that are typically requiring larger than usual margin requirements -- funds set aside as collateral in case of losses.

Wedbush Securities has lifted its margin requirements and is only permitting trades from clients on a "selected" basis, said Bob Fitzsimmons, a managing director for the firm.

"We are commissioning only the select clients who have experience in bitcoins," he said.

"Our risk systems are ready and we have made sure we have our customers and firm protected by increased margins and increased scrutiny."

source: news.abs-cbn.com

Wall Street tumbles to 2014 low as oil prices sink

Wall Street's recent selloff deepened on Wednesday, with the S&P 500 closing at its lowest in over a year as U.S. oil prices plummeted to 2003 lows.

The equities rout was widespread, hitting nine of the 10 major S&P sectors. The small-cap Russell's 2000 index .RUT fell 3.6 percent before reversing its loss late in the session.

The beaten-down S&P energy sector .SPNY fell 2.93 percent, leading the losers. Exxon (XOM.N) dropped 4.21 percent and Chevron (CVX.N) slumped 3.10 percent.

Collapsing oil prices and fears of a slowdown in China, the world's second largest economy and a key market for U.S. companies, have led the S&P 500 to drop 9 percent this year. In the past six months, the energy sector has fallen 26 percent.

"The fear is, 'Is tomorrow going to bring more selling?' People are not even thinking about today, they're thinking about tomorrow," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

U.S. crude sank 6.6 percent on Wednesday as a supply glut bumped up against bearish financial reports that deepened worries over demand.

But a late-day bounce in U.S. oil prices helped reduce losses in stocks.

"If you look at crude prices, they are shooting right back up," Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, said ahead of the close.

The S&P 500 .SPX ended down 1.17 percent at 1,859.33, its lowest close since October 2014. It had fallen as low as 1,812.29.

The Dow Jones industrial average .DJI ended 1.56 percent lower at 15,766.74 points.

After a brief late-day rally into positive territory, the Nasdaq Composite .IXIC lost steam and ended down 0.12 percent at 4,471.69.

The CBOE volatility index .VIX, Wall Street's fear gauge, jumped 5.9 percent to 27.59.

Strength last year in Netflix, Facebook and a handful of other technology stocks masked troubled sentiment in other S&P 500 components, said R Squared portfolio manager Riad Younes.

“You had a crowded trade on a few names that kept the average much higher than it should be,” Younes said. “It feels like a bear market for the average stock.”

IBM (IBM.N) weighed the most on the Dow, falling 4.88 percent after disappointing earnings report.

Netflix (NFLX.O) ended down 0.14 percent despite better-than-expected growth in its subscriber base.

An unusually high 12.5 billion shares changed hands on U.S. exchanges, well above the 7.8 billion daily average for the past 20 trading days, according to Thomson Reuters data.

The New York Stock Exchange recorded 2,271 stocks advancing stocks and 883 decliners. On the Nasdaq, 1,551 issues fell and 1,331 advanced.

The S&P 500 posted no new 52-week highs and 182 new lows; the Nasdaq recorded 5 new highs and 728 new lows.

source: www.abs-cbnnews.com

Pfizer set to buy Allergan for more than $150 billion - sources

Pfizer Inc. secured formal board approval on Sunday for its acquisition of Botox maker Allergan Plc for more than $150 billion (99 billion pounds), a deal that will create the world's biggest drug maker, according to people familiar with the matter.

The deal, the largest ever in the healthcare sector, will be announced on Monday and is sure to draw political ire in a U.S. presidential election year because Pfizer would redomicile to Ireland, where Allergan is registered, in a so-called "inversion" that would slash its corporate tax rate.

It will also reignite debate in the pharmaceutical industry over the role of research and development, with Allergan Chief Executive Brent Saunders, a prolific dealmaker and a skeptic of in-house drug discovery, joining the combined company in a position to influence its strategy.

The deal would involve Pfizer paying with 11.3 of its shares for each Allergan share, the people said. There will also be a small cash component, accounting for less than 10 percent of the value of the deal, the people said.

Pfizer's Chief Executive Ian Read, 62, will be CEO of the combined company, with Allergan's CEO Brent Saunders, 45, serving in a very senior role focused on operations and the integration, the people added.

Saunders will also have a seat on the combined company's board, one of the people said.

The sources asked not to be identified because the terms of the deal are not yet public. Pfizer and Allergan declined to comment.

COLOSSUS

The deal would create a pharmaceutical colossus with annual sales of more than $60 billion, putting the merged group well ahead of No. 2 U.S. drugmaker Merck & Co (MRK.N), which has annual sales of about $40 billion.

Widely used Pfizer drugs such as Lipitor, Viagra and nerve pain treatment Lyrica would be brought together with Allergan's Namenda memory loss treatment, Restasis dry eye medication and other leading eye-care brands.

It would be the biggest merger of the year, topping beer maker Anheuser-Busch InBev's (ABI.BR) proposed $107 billion takeover of SABMiller Plc (SAB.L). And it would realize Read's longtime ambition of an inversion deal that would get Pfizer out from under the 35 percent U.S. corporate tax rate, among the world's highest. The tax rate in Ireland is 12.5 percent.

Pfizer’s talks with Allergan come more than a year after the U.S. firm abandoned a bid to acquire AstraZeneca (AZN.L) and move its tax headquarters to Britain.

The U.S. Treasury last year, and again last week, updated its rules on inversions to make it harder for companies to avoid U.S. taxes by moving overseas. But experts have said these moves would do little to prevent Pfizer from inverting.

Although Pfizer has decried the high U.S. corporate tax rate, it has minimized its U.S. taxes for years by selling its drug patents to overseas subsidiaries and then using them to make drugs that are sold back to U.S. affiliates. While generating big profit margins for its overseas arm, the practice has allowed Pfizer to report losses on its higher-taxed U.S. business in each of the past five years.

Many industry analysts and investors believe Pfizer could be bulking up with Allergan's fast-growing brands as a prelude to splitting by 2017 into two companies - one selling high-margin branded drugs and one selling inexpensive generics that have dragged down Pfizer results over the past few years.

Read, a trained accountant, has said Pfizer could decide on such a split by late 2016, after it completes separate financial analyses of the two businesses.

Pfizer's $15 billion purchase earlier this year of hospital products maker Hospira, which sells generic injectable drugs and is developing biosimilar versions of top-selling biotech medicines, was widely seen as a move to make its generics business more attractive ahead of a sale.

Allergan has agreed to sell its own wide array of generics by early next year to Israeli drugmaker Teva Pharmaceutical Industries Ltd (TEVA.TA) for $40.5 billion.

Speculation has been rife on Wall Street whether Read or Saunders would take the helm of the combined company, and whether Saunders would be content to play second fiddle to Read, who became Pfizer CEO in 2010 after more than 30 years with the company.

Saunders has had a meteoric rise in the industry over the past five years, turning around eye-care company Bausch & Lomb and also leading Forest Laboratories and Swiss drugmaker Actavis, which took the Allergan name after acquiring it this year.

Earlier, he won plaudits for helping Schering-Plough overcome serious quality-control problems and then leading its integration with Merck & Co.

Due to his rapid ascent and moves, Saunders has not presided over start-to-finish development of a drug, a process that can take 12 years or longer.

And unlike large drugmakers who conduct costly discovery research, Saunders has said that it makes more sense economically to acquire medicines that have already shown promise in human trials.

But in a recent interview, Saunders said he would be willing to put a higher emphasis on drug discovery if it makes sense for his company.

Pfizer shares closed little changed on Friday at $32.18, while Allergan's rose 3.4 percent to $312.46, both on the New York Stock Exchange.

source: www.abs-cbnnews.com

Twitter appoints Jack Dorsey CEO, seeks new chairman

Twitter Inc. named Jack Dorsey as its permanent CEO but said it would look elsewhere for a chairman, seeking to allay concerns about its co-founder's dual role as head of the mobile payments company Square.

Twitter's shares rose as much as 6 percent on Monday after the announcement, which ended months of speculation about who would take the top job at the microblogging service.

Dorsey has been running Twitter as interim CEO to much acclaim since his predecessor, Dick Costolo, stepped down on July 1.

"To further simplify the demands on his time as well as to make sure we bring a fresh voice and new leadership to the board, the board has decided to separate the chair and CEO roles," Peter Currie, Twitter's lead independent director, said on a call.

Twitter is working to rekindle growth after its latest quarterly results revealed the slowest rise in monthly average users since the company went public in 2013 - a performance that Dorsey at the time called "unacceptable."

Some investors had expressed concerns about whether Dorsey could run both Twitter and Square, which he also co-founded. Square is expected to go public this year and Dorsey may have to devote substantial time courting investors for the IPO.

But others say Dorsey, 38, is a more effective leader now than in 2008, when he was fired from his first stint as Twitter CEO.

Investors and analysts have lauded faster product rollouts since Dorsey took the helm in July, including a widely available "buy now" button that allows users to make purchases directly through Twitter.

Kevin Landis, portfolio manager at the Firsthand Technology Value fund, said Dorsey should focus on innovation and on finding ways to make Twitter as much as part of its user's daily lives as Facebook is to its users.

"The worst thing you can say about Twitter today is that it looks a lot like the Twitter of two years ago," said Landis, whose fund has owned shares of Twitter since before the company went public.

IN GOOD COMPANY

Dorsey is not the first person to run two major companies. Steve Jobs led Apple Inc (AAPL.O) and animated movie studio Pixar for several years. Elon Musk runs electric car pioneer Tesla Motors Inc (TSLA.O) and rocket maker SpaceX.

Dorsey sent Twitter's first tweet - "just setting up my twttr" - in March 2006. He had more than 3 million followers as of Monday, more than either Musk or the current Apple CEO, Tim Cook.

Shebly Seyrafi, analyst at FBN Securities, said Twitter might be seeking to limit Dorsey's already heavy workload. But that is only part of the rationale, he said: an outsider as chairman is also a way to keep "a check" on the chief executive.

It might also offer protection against any potential conflict of interest. Among other recent innovations driven by Dorsey is a partnership with Square that lets users make political donations through Twitter.

"You could potentially see conflicts of interest with Square," said James Cakmak, analyst at Monness, Crespi, Hardt & Co. "It hasn't happened yet, but at that time it would help him recuse himself from conversations that do involve Square."

Initially, Dorsey appeared to have been excluded from running Twitter after the company said its CEO job would be full-time.

"We assumed we would only consider a candidate who could make an undivided commitment to be our CEO," Currie said. "But over time it became apparent to us that Jack was not just meeting but surpassing the expectations we had of him as interim CEO, while also running Square."

Tech news website Re/code first reported Dorsey's permanent appointment last week. Dorsey will remain on Twitter's board. Costolo resigned from the board on Sept. 30.

Adam Bain, previously Twitter's president and head of revenue and once considered a favorite for the top job, was named chief operating officer.

Twitter's shares rose 5.8 percent to $27.84 on the New York Stock Exchange.

source: www.abs-cbnnews.com

Verizon to buy AOL in $4.4 billion deal

Verizon Communications Inc. said it would buy AOL Inc. in a $4.4 billion deal that gives the biggest U.S. wireless carrier access to AOL's successful digital advertising service and content including the Huffington Post news website.

The offer of $50 per share represents a premium of 17.4 percent to AOL's Monday close of $42.59.

AOL shares traded as high as $50.70 before the opening bell on Tuesday. Verizon shares were down about 1 percent at $49.32.

The deal, which includes about $300 million of AOL debt, will take the form of a tender offer followed by a merger, with AOL becoming a wholly owned subsidiary of Verizon.

Verizon said it expects to fund the transaction from cash on hand and debt.

Tim Armstrong, who has spearheaded AOL's transformation into one of the most successful advertising technology companies, will continue to lead the company after the sale.

"When you look at where we are today and where we are going, we have made AOL as big as it can possibly be in today's landscape," Armstrong told CNBC.

"..There is no better partner for us to go forward with than Verizon," he said.

Activist-investor Starboard Value LP had urged Yahoo Inc. to consider a merger with AOL, whose businesses include the TechCrunch blog.

AOL reported a 7.2 percent rise in first-quarter revenue to $625.1 million, boosted by demand for its real-time bidding platform that helps advertisers place video and display ads on other digital properties.

AOL was a technology behemoth in 2000 when it bought Time Warner for more than $160 billion. That deal became a disaster and AOL was spun off from Time Warner in 2009 and was listed on the New York Stock Exchange at a value of $3.4 billion.

Verizon has been spending aggressively to expand its business. In February it bought licenses worth $10.4 billion in a government sale of wireless airwaves for mobile data.

LionTree Advisors, Weil Gotshal & Manges and Guggenheim Partners advised Verizon.

AOL's advisers were Allen & Co LLC and Wachtell Lipton Rosen & Katz.

Up to Monday's close, AOL's shares had gained 12 percent and Verizon's 3.4 percent in the past 12 months.

source: www.abs-cbnnews.com

After 15 years, Nasdaq recoups losses of dot-com crash

NEW YORK - Mark April 23, 2015 as the day the Nasdaq market finally left the dot-com crash, and billions of dollars lost to the first technology bubble, behind.

It's been a long time -- 15 years, one month and 13 days to be exact. On Thursday, the Nasdaq Composite Index finished at a new closing high, 5,056.06, topping the previous mark set on March 10, 2000 of 5,048.62.

This time around, the gains on the Nasdaq exchange might hold on for a bit longer.

The upstart market that symbolized the new era of the Internet economy and digital life -- as opposed to the old heavy-industry stalwarts of the Dow Jones Industrial Average -- climbed spectacularly from 1996 to early 2000.

Over that time the index quintupled to mint thousands of new multi-millionaires and fund sharp and quirky new companies rooted in San Francisco and Silicon Valley. The Dow barely doubled in the same period.

Investors and media celebrated it as the "New Economy," leaving the old one behind. The Nasdaq exchange itself was the symbol, trades humming through computers while the New York Stock Exchange still had dealers operating via slips of paper and hand signals on a physical trading floor.

But the Nasdaq, trading many companies that proved to be more dreams on paper and in garages than sources of tangible profits, then crashed as spectacularly, losing nearly all of the late 1990s gains in 30 months, and stunning hundreds of thousands of investors who ventured into the markets for the first time drawn by dot-com dreams.

The market bottomed at 1,114.11 in October 2002.

Spurred by the economy's growth under low interest rates and higher government spending, it slowly regained the trust of once-burned investors and pressed back toward the 3,000 level, only to have the rug pulled out again with the financial crisis.

That time, all the markets plunged, and the Nasdaq, which was strengthening with more proven Internet and biotechnology companies, fared less bad than the other key indices, the Dow and the S&P 500.

From the 2009 bottom, the Nasdaq bounced back faster and farther. Yet by 2013, when the Dow and S&P began topping previous records and continued to do so, the Nasdaq was still two years from total recovery.

Apple leads the way

The return to the heights of 2000 has been driven by significant shift in the makeup of the Nasdaq market.

In 2000, the index was led by software companies and chipmakers: Microsoft, Cisco, Intel, Oracle, and Sun. Yahoo was the seventh largest company on the exchange, Amazon ranked 41st and Apple 45th. Google was just emerging in the industry, and only joined the exchange in 2004.

Today it's Apple at the top, now the largest company in the world, worth $755 billion by market capitalization.

Google is the Nasdaq's second largest company at $372 billion, and Microsoft is only third, worth $356 billion, its share price still one-third lower than the peak 15 years ago.

Amazon, the online retailing king, is fourth and a company no one had dreamed of at the time, Facebook, fifth.

Intel and Cisco are still among leading companies, but are now flanked by telecoms -- Comcast and Qualcomm -- and biotech firms like Gilead, Amgen, Biogen and Celgene.

Those, and a range of other less technology-focused companies like Walgreens and Starbucks, have underpinned what analysts say is a more healthy rebound grounded in real profits and growth of the companies.

Michael Stiller, a technology sector analyst at Nasdaq, points out that the world itself has changed since the early dot-com days. Smartphones have revolutionized personal communications, access to the Internet has spread globally through China, Africa and elsewhere, and now doing business online is near-universal.

But like the S&P 500, which barely missed setting a new record Thursday (the previous one set just six weeks ago), the Nasdaq market has reached its new highs with the help of the Federal Reserve keeping interest rates at their lowest levels in history for more than six years.

That has pushed money toward stocks that, at more normal interest rates, might not sustain such valuations, say some analysts. But valuations on the Nasdaq are still far more sane than they were in 2000.

The price/earnings ratio for the market Thursday stood at about 25 times, compared to about 190 when the market peaked in March 2000.

source: www.abs-cbnnews.com

Pacquiao rings NY Stock Exchange closing bell

NEW YORK CITY – People's champ Manny Pacquiao rang the closing bell at the New York Stock Exchange, the first Filipino boxer to do so.

"It’s a good experience," Pacquiao said.



Pacquiao is on a six-city tour to promote his bout with American Chris Algieri in Macau on November 22.

Pacquiao was joined in the event by Algieri.

"That was awesome! Of all things we've done on tour, that was my favorite," Algieri said.

Dozens of fans waited outside the exchange to meet the two boxers.

"Pacquiao, goodluck! Bugbugin mo si Algieri," said fan Lawrence Bautista.

Pacquiao, the winner of world titles in eight different weight divisions, will fight Algieri to keep his WBO Welterweight crown.

source: www.abs-cbnnews.com

Why betting on 'boring' stocks can pay off

NEW YORK - Largely ignored during much of last year's 30 percent rally in the Standard & Poor's 500 Index, the stocks leading the U.S. market this year rank among its usually sleepiest components.

The best sector in 2014 is utilities, including Consolidated Edison, about as staid a group as one can get. They're up 14.5 percent on a total return basis this year, compared with 6.4 percent for the S&P 500 as a whole.

What's happening is the opposite of what ordinarily happens in a moving market. It relates to an investing concept known as "beta," which refers to the amount of risk a particular stock adds to a portfolio. Stocks that tend to rise or fall with the market - but in a more pronounced way - are called "high beta." They generally outperform in up markets and fall the most in down markets.

Best Buy and Priceline, two discretionary stocks that were among the S&P's strongest in 2013, are good examples because their sales and profits rise along with the economy, and they led the way last year.

This year, those stocks are lagging the more boring "low beta" stocks - those that tend to move less dramatically than the market. It's a signal that investors are worried about earnings growth and U.S. economic demand, and don't want to bet as heavily on the types of stocks that generally qualify as high beta - often cyclical names in the technology, discretionary and energy sectors.

To be sure, this may change if growth picks up, but after U.S. gross domestic product contracted in the first quarter for the first time in three years, investors are cautious.

"You see this all over the place -- people are still scared," said Richard Bernstein, CEO of Richard Bernstein Advisors in New York. "They're still more worried about protecting to the downside than accentuating the upside."

That's helped drive equities' rotation into the more defensive, high-dividend paying names, also typically part of the low-beta camp.

So far this year, the 50 stocks in the S&P 500 with the lowest beta scores - a group that includes ConEd and McDonald's - are up on average by 12 percent. Meanwhile, the 50 highest beta stocks, which include Citigroup and Best Buy, are up an average of 7 percent.

In 2013, the 50 highest-beta S&P 500 stocks rose an average of 51.4 percent, compared with 21.3 percent for the 50 lowest-beta stocks.

Investors who have pursued the high-beta contingent have suffered. Among them are hedge funds, which kept a heavy exposure to momentum-type names and the "beta" strategy.

Hedge funds now have 3.8 times more net cyclical exposure to defensive stocks, said Jon Kinderlerer, a managing director at Credit Suisse. In January, that measure was 4.7 times - bets that went sour as the market corrected through the first quarter.

"Once that trade began to break, that also accelerated a rotation back into more value-oriented names and sectors," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

BIGGER DIVIDENDS, HIGHER VALUATIONS

This year's winners deliver nearly twice the dividend yield than their high-beta counterparts. Stocks with the lowest betas have an average dividend yield of 3.1 percent compared with 1.7 percent for high-beta stocks, Thomson Reuters data shows.

What's unusual is that S&P's high-beta stocks are at some of their cheapest valuations ever relative to the S&P 500, said Bernstein, whose data goes back to 1986.

To Bernstein, that's a positive sign for the market's long-term health as it shows investors aren't overpaying for growth. "Find me a market peak where investors have been scared of beta," he said.

He noted, however, that there are plenty of high-beta names among the broader stock universe like the Russell 2000 with rich valuations - companies like Monster Worldwide - which aren't in the S&P 500.

Among stocks with the highest betas in the S&P 500, Seagate Technology has a P/E of just 10.6, while Hartford Financial Services Group has a P/E of 10.9.

The high beta stocks currently have a median P/E of 15.2 versus a median P/E of 16.4 for all of the S&P 500 stocks with beta scores. The low beta names have a median P/E of 16.1.

Growth sectors have rebounded in recent sessions as the earnings outlook has improved, with calendar year 2014 estimates rising to 9.1 percent as of June 6 from 8.7 percent on April 1, according to Thomson Reuters data.

"Everything is hanging on the estimates for growth in the second half. How that plays out will determine whether higher beta or low beta outperform for the year," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

source: www.abs-cbnnews.com

LOOK: Captain America stars at NY stock exchange

S&P 500 closes at record high

NEW YORK - Actors Chris Evans, Sebastian Stan and representatives from Marvel Comics and the movie "Captain America: The Winter Soldier" rang the opening bell at the New York Stock Exchange.

Disney's Marvel superhero sequel opened at No. 1 in 30 of 32 markets in which it debuted. The film took in $75.2 million in its overseas box-office debut this weekend.

Meanwhile, U.S. stocks rose for a third straight session on Tuesday, with the S&P 500 ending at a record close, after positive data on factory activity indicated economic growth was gaining traction following a harsh winter.

Gains were broad, with areas of the market closely tied to the pace of economic growth among the day's leaders. Consumer discretionary stocks rose 1.4 percent while technology shares were up 1.3 percent.

Among other groups, the PHLX housing sector index rose 1.6 percent and the Nasdaq biotechnology index added 2.1 percent. The Dow Jones Transportation index rose 0.9 percent to a record.

The Institute for Supply Management (ISM) said its index of national factory activity rose to 53.7 in March, its second straight monthly acceleration. However, the report was below the median forecast of 54.0.

The ISM report was the latest to point to improving economic conditions, giving credence to the theory that soft data earlier this year was due to weather and not weakening fundamentals.

"There's a whiff of spring in the economic data, which means we're starting the second quarter with signs that the economy is maintaining the kind of reasonable growth that will continue to support the market," said Jim McDonald, chief investment strategist at Chicago-based Northern Trust Global Investments, which has about $884 billion in assets under management.

"I'm comforted by the rise in discretionary and homebuilding stocks, since those are the ones that really show economic strength. Meanwhile the rise in biotech shows improved risk appetite."

Ford Motor Co jumped 4.6 percent to $16.32. U.S. auto sales rose more than expected in March, following two months when demand was hampered by weather.

General Motors Co dipped 0.2 percent to $34.34, although its March sales also topped forecasts. Mary Barra, the company's chief executive, told a House Energy and Commerce subcommittee GM has retained Kenneth Feinberg as a consultant to gauge possible responses to families of those injured or killed in crashes involving recalled cars.

Among tech names, Google Inc rose 1.8 percent to $1,134.89 and Microsoft Corp added 1 percent to $41.42. Both were among the biggest boosts to the Nasdaq 100 index, which rose 1.7 percent. Shares of Cisco Systems jumped on heavy volume, up 3.9 percent to $23.10 as the biggest advancer on the Dow.

The Dow Jones industrial average was up 74.95 points, or 0.46 percent, at 16,532.61. The Standard & Poor's 500 Index was up 13.18 points, or 0.70 percent, at 1,885.52. The Nasdaq Composite Index was up 69.05 points, or 1.64 percent, at 4,268.04.

The S&P 500 has gained for three straight sessions, up about 2 percent over that period.

About 69 percent of stocks traded on the New York Stock Exchange closed higher on Tuesday while 72 percent of Nasdaq-listed shares ended up. About 6.41 billion shares traded on all U.S. platforms, according to BATS exchange data.

Financial data firm Markit said its U.S. Manufacturing Purchasing Managers Index slipped to 55.5 in March, unchanged from a preliminary reading, but the rate of growth and the pace of hiring remained strong.

Construction spending edged up 0.1 percent in February, curbed by a drop in private residential projects.

Intuitive Surgical Inc jumped 12.7 percent to $493.60 as the best performer on the S&P 500. The U.S. Food and Drug Administration gave marketing clearance for the company's da Vinci Xi Surgical System.

Medicines Co tumbled 15.5 percent to $24.02. A U.S District Court ruled a generic version of its blood thinner made by Hospira Inc did not infringe two of Medicine Co's patents. Hospira shares gained 2.4 percent to $44.27.

After the market closed, shares of Apollo Education fell 3.7 percent following its results.

source: www.abs-cbnnews.com

Meet Italy's 'sofa king'

SANTERAMO IN COLLE, Italy - From this hilltop town on the heel of Italy's boot, Pasquale Natuzzi has built an eponymous furniture company that is one of the country's most global brands. It sells sofa beds from Dallas to New Delhi and is one of a handful of Italian companies listed on the New York Stock Exchange.

Yet today, Natuzzi's home base is dragging it down. Best known for its brand Divani & Divani, the company hasn't made a profit in six years. In the first nine months of 2013, it lost 38.7 million euros, deepening year-on-year losses on a slight dip in sales to 328 million euros.




Though it sells in 123 countries, and has factories in China, Romania and Brazil, Natuzzi says the main reason for his company's woes is the high cost of making sleek sofas and armchairs at home.

The core of its production and half of its 6,500 worldwide employees are in Italy where high labour costs and strict employment laws make it hard for companies to keep up with more nimble competitors elsewhere.

It costs Natuzzi up to 10 times more to make a product in Italy than in its factory in China and although it has been proactive opening factories abroad is under pressure from Italian unions to keep jobs at home.

The result is that, as the recent economic downturns have hit Natuzzi's key consumer markets of the U.S. and Europe, the company hasn't been able to adjust its cost base to compensate for the fall in consumer spending.

"The orders we have are enough to employ 1,500 people, not our 3,200 [in Italy]," the 73-year-old Natuzzi, who is company chairman and chief executive officer, said in a recent interview in Milan where he was unveiling the new Revive armchair.

Late last year, Natuzzi agreed to a government-brokered plan that will allow the company to avoid laying off more than a thousand workers, while pledging 242 million euros to breath new life into the company's Italian operations.

Natuzzi's predicament is just another chapter in Italy's industrial decline. In the 1980s and 1990s, many Italian companies began exporting abroad helped by devaluations of the lira that allowed them to price lower than foreign rivals.

But that advantage was lost when Italy adopted the euro in 1999 - around the same time that European goods faced a flood of competition from low-cost rivals from China.

Italy's efforts to loosen its labor laws have stumbled, despite attempts - most recently in 2012 - to make it easier for companies to adjust their workforce to economic cycles.

Italy's social security and labour taxes are among the highest in Europe. Despite the 2012 reforms, it is still difficult for companies to downsize for economic reasons. Usually companies resort to state-funded furlough schemes in which workers are still employed by the company and receive a salary, paid largely by the state even though they don't work.

As a result, many companies, especially in the textile business, subcontract work to tiny firms to increase flexibility because they don't fall under the strictest of labour rules or to lower costs because they hire workers on under-the-table terms in order to evade taxes.

Until about a decade ago Natuzzi used subcontractors, but - under pressure from unions - stopped outsourcing its production and now operates fully-owned plants.

A fire in a factory last month in Prato, near Florence, that killed seven workers who had been sleeping where they sewed cheap clothes during the day thrust the spotlight on some 5,000 sweat-shops that often violate labour and health regulations.

After the fire, Natuzzi wrote a letter to Italy's president, complaining about "unfair competition" of rivals who use subcontractors that enjoy little regulatory oversight.

"This is a type of business that seems legal, but that breeds on illegality. In order to offer products at lower prices, these subcontractors almost always break the law," Natuzzi wrote in his letter.

Donato Caldarulo - president of one of southern Italy's upholstery districts where many of the small subcontractors are based - said in a statement that while there were some "irregularities" in the industry, "the respect of legality is something that all the companies operating in this district hold close to their hearts."

AMERICAN DREAM

Pasquale Natuzzi founded his company in 1959 together with three friends, but the brand's fortunes didn't really take off until the entrepreneur began selling in the United States in the early 1980s, taking advantage of Italy's weak currency to attract buyers in the world's largest consumer market.

Some 90 percent of the company's production is now exported outside of Italy, with 45% of its turnover made in the U.S.

In 1993, Natuzzi listed on the New York Stock Exchange, a major coup that gave its founder -- who was dubbed the king of sofa in Italy -- added cachet back in his home country.

Paolo Moramarco has been working in Natuzzi's Santeramo maintenance unit for 22 years. He says the name was enough to get him a mortgage when he and his wife were buying a house.

"Thankfully, I've finished paying the mortgage because today, if you show up at the bank with a Natuzzi paycheck, they ask for proof of another income," he said.

Problems for Natuzzi began in the early 2000s, partly because of the strengthening euro and because of the global economic downturn that followed the September 11, 2001 attacks on the World Trade Center in New York. Between 2007 and 2012, Natuzzi racked up 140 million euros in losses.

The decline in consumer spending hit much of the furniture industry of southern Europe. Between 2000 and 2012, the turnover from the myriad upholstery companies in Puglia and Basilicata regions dropped to 28.5 billion euros from 42.5 billion euros, according to industry association Federlegno-Arredo.

Last year, Natuzzi's sales fell to 468.8 million euros from 486.4 million euros the year earlier. In the first nine months of 2013, sales dropped by 6 percent in Europe, 7% in Italy and 1.5% in the U.S.

"Our efforts to make our company more competitive at the global level have been rendered vain," said Natuzzi in emailed answers to questions.

To balance his high labour costs in Italy, where Natuzzi operates five of its nine worldwide factories, it has expanded production to China, Brazil and Romania.

Production costs are 20 eurocents per minute worked in Romania and 10 eurocents in China. But in Italy, where 3,175 employees are based, the cost has soared to one euro per minute worked - a cost that is unsustainable, especially compared to rivals in Italy who use subcontractors that cost a fraction.

"To be competitive, we would need to get to 50 cents," per minute worked for our Italian factories, says Natuzzi.

Consofa, a consortium of upholstery makers - was recently fined for violating labour laws. In a statement, Consofa said that it believed authorities had "made an erroneous evaluation of its contractual relationship with subcontractors and suppliers," adding that it was sure it would "be able to confirm the correctness of our operations."

Michele Giannelli, who works on the assembly line in Santeramo, says he can understand fellow workers who accept under-the-table jobs with subcontractors. "If someone has lost his job, can't rely on unemployment schemes and faces the bank confiscating his house, then it's a matter of survival."

Natuzzi's woes in Italy reached fever pitch over the past year. The company has 1,450 of its workers on Italy's state-run furlough scheme and last spring warned it would have to begin a collective lay off scheme because of the worsening economy.

In October of last year, the company reached a deal with unions and the government in which it will offer buyouts to 600 workers and, in conjunction, bring part of its Romanian production back to Italy by creating two new local subsidiaries.

The challenge, Natuzzi says is still to bring down local labour costs, something the company is looking into.

"We aren't looking for the simplest way out, rather the best and fairest one," he said.

source: www.abs-cbnnews.com

Big year ends with Wall Street hopeful for 2014

NEW YORK - As Wall Street's best year in more than 15 draws to a close, few are expecting a repeat performance in 2014, though traders have plenty of reasons to feel optimistic.

While the market will likely enter January quietly, with many traders still out for the holidays and few major catalysts, the upward trend is seen continuing next week, especially in some of 2013's high-flying names.

Economic growth is expected to accelerate next year, boosting employment and consumer purchasing power. But with markets repeatedly notching all-time highs, that may not translate to market gains as dramatically as in 2013.

"There's a pervasive feeling that the economy is getting better, and the Fed is still on the market's side after saying it would keep rates low," said Donald Selkin, chief market strategist at National Securities in New York.

"However, while new money will still be flowing into stocks next year, probably we'll see less money come in. There's little chance of another 30 percent gain or so next year."

The S&P 500 has risen 29 percent so far in 2013, its best annual performance since 1997. The Dow Jones industrial average is up 26 percent while the Nasdaq is nearly 38 percent higher.

The gains have been widespread, with all 10 S&P 500 sectors higher on the year. The weakest group, telecoms, rose 6.5 percent while consumer discretionary led the year with a gain of 40 percent.

One of the market's biggest boosts this year - the Federal Reserve's stimulus program - will not be as strong a factor after the central bank announced a slowing of the program in December. The Fed beginning in January will buy $75 billion in Treasuries and mortgage-backed bonds per month, down from $85 billion, and Fed Chairman Ben Bernanke, whose term expires on Jan. 31, 2014, suggested the U.S. central bank could continue to slowly reduce that stimulus throughout 2014.

The latest Reuters poll showed analysts expect the S&P 500 to rise to 1,925 points by the end of 2014, which represents a rise of 4.5 percent from current levels.

Subscription video company Netflix Inc was the S&P's strongest performer in 2013, with a jump of almost 300 percent, followed by electronics retailer Best Buy Co Inc and semiconductor maker Micron Tech, both of which climbed nearly 240 percent. Tesla Motors was another standout, soaring 346 percent, while Facebook Inc more than doubled.

These names could see more upside this week due to "window dressing," a practice in which investors buy securities with big gains to improve the appearance of their holdings before presenting the results to clients. The 2013 year will close out on Tuesday, with the market closed on Wednesday for the New Year's Day holiday.

"Consumer discretionary and tech names have driven the market over the past 12 months, so it wouldn't surprise me to see continued upside on them next week," said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma.

However, Dollarhide said the names were "priced for perfection" and vulnerable to pullbacks next year.

"There won't be a sudden 'let's sell Micron and Netflix' movement, but if profit growth slows or a conference call doesn't go well, absolutely you could see a 20 to 30 percent selloff after doubling this year," he said.

The fourth-quarter earnings season will not start in earnest until the second week of January, but there will be a few clues into the economy's strength coming out next week, with data on consumer confidence and manufacturing.

Next week will also see reads on the housing market with November pending home sales on tap for Monday and the Case/Shiller report on October home prices on Tuesday. The housing sector has been in focus as U.S. benchmark Treasury yields rose to two-year highs, which could put pressure on mortgage rates, which are typically driven by the yield on the 10-year Treasury note.

"If yields stay this high, I would consider that both a technical and psychological negative for markets," said Mark Grant, managing director at Southwest Securities in Fort Lauderdale.

Pending home sales, or sales which are in contract but not yet closed, are seen rising 1 percent while the October home prices are expected to rise 0.8 percent.

In the latest week, the Dow rose 1.6 percent while the S&P was up 1.3 percent and the Nasdaq rose 1.3 percent.

source: www.abs-cbnnews.com

Twitter shares soar in frenzied NYSE debut

NEW YORK/SAN FRANCISCO - Twitter Inc shares rose 73 percent in a frenzied trading debut that drove the seven-year-old company's value to $25 billion and evoked the heady days of the dot-com bubble.

The stock closed its first trading day at $44.90 a share from the initial public offering price of $26 set late on Wednesday, falling back from a near-doubling in price at a session high of $50.

Investor enthusiasm for the microblogging company defied traditional valuation analyses. The shares traded at about 22 times forecast 2014 sales, nearly double the multiple at social media rivals Facebook Inc and LinkedIn Corp, even though Twitter is far from turning a profit and posted a loss of almost $70 million for its most recent quarter.

Yet fans believe that Twitter, which has 230 million users globally, has established itself as an indispensable Internet utility, alongside Google Inc and Facebook, and that it has only scratched the surface of its potential as a global advertising medium.

"When people use Twitter they are following certain people, they're searching for specific information," said Mark Mahaney, an analyst at RBC Capital Markets. "There are powerful marketing signals that are almost Google-esque, something that Facebook doesn't really have."

The IPO was shadowed for months by Facebook's troubled 2012 debut, in which the shares quickly fell below their offering price amid trading glitches and subjected the company and its lead banker, Morgan Stanley, to accusations that they had been greedy in pricing the deal.

Twitter's opening appeared to go off without a hitch, prompting Anthony Noto, the Goldman Sachs banker who led the IPO, to write a simple Tweet: "Phew."

Still, Twitter may find itself subject to the opposite criticism, that it had priced the shares too low and left more than a billion dollars on the table.

"In my mind they certainly could've raised the price on this thing and gone into the low 30s," said Ken Polcari, director of the NYSE floor division at O'Neil Securities. "From an outsider looking in I would say they were overly cautious because they didn't want a disaster on their hands ... I'm sure the company didn't want a Facebook debacle, I get that, but I think they were overly cautious and it cost them some money."

Heavy demand for the IPO shares was apparent before the final pricing. Market sources said investors had asked for 30 times the 70 million shares on offer in the IPO, representing about 13 percent of Twitter's outstanding common shares.

Twitter could raise $2.1 billion if an underwriters' over-allotment is exercised, as expected, making it the second largest Internet offering in the United States behind Facebook Inc's $16 billion IPO last year and ahead of Google Inc's 2004 IPO, according to Thomson Reuters data.

The NYSE, which snatched the listing away from its tech-focused rival, Nasdaq, marked the occasion with an enormous banner with Twitter's bird logo along its Broad Street facade.

Twitter executives including Chief Executive Dick Costolo and the three co-founders - Evan Williams, Biz Stone and Jack Dorsey - appeared on a packed exchange floor to witness the debut.

At current valuations, the stakes owned by Williams and Dorsey would be worth around $2.7 billion and $1.1 billion, respectively. Costolo, who invested $25,000 in the fledgling company in 2007, holds a 1.4 percent stake worth about $360 million.

They hefty valuations were cause for celebration for some insiders but they sounded alarm bells for some investors who cautioned that the froth was unwarranted.

"With a price that pushes into the high 30s and beyond, Twitter is simply too expensive," Pivotal Research's Brian Wieser wrote in a note cutting his rating on the stock to "sell" from "buy". "One way to justify a $45 price in our model would involve presuming that Twitter could generate more than $6bn in annual revenue by 2018. However, we think that would seem overly optimistic."

British actor Patrick Stewart, of Star Trek fame, rang the opening bell at Big Board together with nine-year-old Vivienne Harr, who started a charity to end childhood slavery using the microblogging site.

"I guess I represent the poster boy for Twitter," Stewart said, adding that he had only been tweeting for about a year.

IN SAN FRANCISCO

At Twitter's headquarters in San Francisco, offices opened early and hundreds of employees flocked to the 9th floor cafeteria to watch the festivities on TV while eating "cronuts," a croissant-donut hybrid, made by Twitter's resident chef, Lance Holton.

The public debut is the latest milestone for a service that was born out of a nearly-defunct startup in 2006 and was derided by many in its early years as a silly fad dominated by people talking about what they had for breakfast.

But Twitter quickly began to penetrate popular culture in unexpected ways, with its open design and broadcasting format attracting celebrities, athletes, politicians and anybody who wanted to share short, punchy thoughts with a digital audience.

Its business potential developed more slowly, and the company appeared to be floundering as recently as three years ago, when it was riven by management turmoil and frequently crippled by service outages.

Under Costolo, who took over as CEO in October 2010, the company has rapidly ramped up its money-making engine by selling "promoted tweets," messages from marketers that are distribute to a wide-ranging but targeted group of users. In the third quarter, Twitter made $168 million in revenue, it said, more than double from a year prior.

The company said in its investor prospectus that more than three-quarters of its users are outside the United States. Despite its early reputation as a hangout for Silicon Valley early adopters and tech geeks, some of its most active markets now include Japan, Indonesia, Brazil and Saudi Arabia.

The three most-followed accounts belong to a trio of pop stars: Katy Perry, Justin Bieber and Lady Gaga. (U.S. President Barack Obama comes in fourth.)

"Twitter has, when coupled with the increasing distribution of smart phones and reach of the Internet, an impact on global connectivity and transparency," said P.J. Crowley, the former U.S. State Department spokesman. "It has definitely contributed to the acceleration of the news process and helped to expand the availability of information sources to a wide range of people."

The 140-character messages have spawned an Internet culture of its own. The "hashtag," a pound symbol devised by early Twitter users to denote the topic of a conversation, has became ubiquitous, with the word even becoming an ironic expression parodied by the likes of "Saturday Night Live."

SELL RATING

As Twitter's stock soared after the opening, the company's market value, including restricted share units and other securities that could be exercised in the coming months, was over $28 billion.

Fund managers who got small allocations at the IPO were hopeful the stock would trade down after Thursday's pop.

"We have a target of $40 and we won't buy more as long as it is trading above that," said Mark Hawtin, portfolio manager of the GAM Star Technology Strategy.

Jerry Jordan, manager of the $48.6 million Jordan Opportunity Fund, who got a small allocation, said he would buy more of Twitter if it trades down around $30-$35.

"A lot of these sexy IPOs have a big pop on the first day and then they grind sideways," Jordan said.

Twitter's successful debut is likely to stoke interest in other up-and-coming consumer Internet companies such as Uber, Pinterest, Airbnb and Square, all of which boast private-market valuations well north of a billion dollars and could go public in the coming years.

Still, two early social media success stories, Groupon Inc and Zynga Inc, have suffered major reversals since going public last year. Groupon, despite big gains in its shares this year, still trades at less than half its 2011 IPO price. Zynga is worth about a third of its 2012 IPO price.

And first-generation social media firms such as MySpace have all but vanished as fickle users moved on to the next big thing.

(Additional reporting by Jessica Toonkel and Christian Plumb in New York, Bill Rigby in Seattle and Sruthi Ramakrishnan in Bangalore; Editing by Jonathan Weber, Tiffany Wu and Tim Dobbyn)

source: www.abs-cbnnews.com

Ford recalls 539,000 minivans, SUVs worldwide

Ford Motor Co, the No. 2 U.S. automaker, recalled about 539,000 vehicles worldwide in two separate actions to repair flaws that may lead to fires in some SUVs and the loss of power in some Mercury and Ford minivans.

Ford will recall 286,000 Ford Escape SUVs made for the 2001 and 2002 model years. It will also recall nearly 253,000 Ford Freestar and Mercury Monterey minivans for 2004 and 2005 model years, Ford spokesman Dan Pierce said on Wednesday.

Most of the affected vehicles are in the United States.

The Escape recall follows a similar action in 2007 to fix a flaw in the antilock brake system, according to a Ford filing with the National Highway Traffic Safety Administration.

But some SUVs may not have been completely inspected or received a proper fix, Ford said in Wednesday's filing.

Some of those SUVs were outfitted with a faulty brake master cylinder reservoir cap that could leak brake fluid. That could cause an electrical short in the antilock brake system leading to smoking or fire.

"There are reports of property damage as a result of fire beyond vehicle-only damage," Ford said in its report. There have been no reports of injuries due to the problem.

The defective part was built from October 1999 to July 2002 in a factory that is now closed. In some cases, parts shortages could delay the necessary repair.

"While the potential for fire is low, it is recommended that a customer park their vehicle outdoors away from structures until this recall repair is performed," Pierce told Reuters in an email.

In a separate recall, Ford told U.S. safety regulators that it would recall the Ford and Mercury minivans due to a defective torque converter. Ford discontinued the Mercury brand in 2010.

If the converter malfunctions, the vehicle could lose "motive" power, or the ability to move forward and reverse, without warning.

When a vehicle loses motive power, it can still be steered and stopped because the engine continues to run, Ford said. But the condition increases the risk of a crash.

Ford shares closed 2.3 percent higher at $12.07 on the New York Stock Exchange.

source: abs-cbnnews.com

Kodak edges toward bankruptcy

NEW YORK — Eastman Kodak, the company which brought photography to the masses a century ago, faces a gloomy future amid new reports that it is on the edge of bankruptcy.

Never able to rebuild after the digital wave blew its core film business away from the mass market, the Wall Street Journal reported late Wednesday that Kodak has already begun preparing to ask for protection from creditors.

On Tuesday, the New York Stock Exchange told the company, once one of the fabled 30 Dow Jones blue chips, that it faces delisting from the exchange if it cannot get its stock price back above $1.00 level.

In its heyday, Kodak shares topped $80 in 1996 — just at the outset of the digital photo revolution that eventually replaced the need for consumers to buy Kodak film, once a virtual monopoly in the US market.

On Wednesday its share price plunged 28 percent to 47 cents a share; Thursday it sank another 10.6 percent to 42 cents as Moody's downgraded the company's debt rating to a very low Caa3, citing "a heightened probability of a bankruptcy over the near term."

And on Thursday the company's chief communications officer quit, following in the wake of three board directors in the past two weeks.

The Wall Street Journal said the company is still hoping that it can sell off some of its valuable patent portfolio to raise money.

But if that last-ditch effort fails, it could file for bankruptcy under Chapter 11 protection, later this month or in February, the Journal said citing sources familiar with the issue.

That would place the jobs of its 19,000 employees in question. At its height in the 1980s, it had 145,000 workers.

Kodak declined to comment on the reports, but its books have been awash with red ink for years. The last time it reported a net profit was the small gain in 2007. Its steady decline was already marked when it was dropped from the prestigious Dow Jones Industrial Average of 30 top US companies in 2004.

Founded in 1892 by inventor George Eastman, Kodak developed handheld "Brownie" cameras that were sold at popular prices, and furnished the film that would keep consumers pumping profits into the country for decades.

Three generations of Americans and many in other countries learned to snap photos with Brownies.

And "Kodak Moment", the company's advertising catchphrase for its film, was embedded deep into the vernacular.

The company meanwhile was lauded as one of the country's top technology innovators —the Apple or Google of its time.

Ironically, it pioneered research into digital photography beginning in the mid-1970s. But it was Asian electronics manufacturers that stole a march in that market in the 1990s as Kodak failed to see the need to break from its old business lines.

"They were the ones who invented the digital camera, but they didn't believe in it," said Gregori Volokhine of Meeschaert Capital Markets.

In September, Kodak hired the law firm Jones Day as advisors for restructuring, though many analysts noted that the firm also advises bankruptcies.

Kodak though sought to shore up its finances by selling often some of its huge portfolio of patents, including in digital imaging.

That could bring substantial cash and buy time, though Moody's said the threat of bankruptcy will make such sales more difficult.

"But when one is a desperate seller, the buyers have no interest in rushing because it will be cheaper when Kodak is completely on the floor," said Volokhine.

"The problem with a bankruptcy is that it does nothing to increase the value of Kodak's patents," said Douglas McIntyre of 247WallSt.com.

"If they have a very large value, Kodak would have gotten that already. It has had months to complete a process to use its intellectual property to bolster its balance sheet. That has not happened." — Agence France-Presse

source:gmanetwork.com