Twitter Opens 73% Above IPO Price; GDP Beats Estimates
Today's financial recap and tomorrow's financial outlook.
The government reported the advance estimate of third quarter GDP in the morning. The economy grew at a 2.8% annualized pace, or 2.12%, from a year ago. Economists were forecasting 2% growth. The larger-than-expected growth was largely attributed to a substantially larger-than-average change in inventories, which increased GDP by 0.83%. Jobless claims fell to 335,000 during the prior week, inline with economist estimates.
S&P 500 (INDEXSP:.INX) futures rallied briefly before the market opened, but quickly reversed gains in early trading. Momentum stocks like Google (NASDAQ:GOOG), Facebook (NASDAQ:FB), Tesla (NASDAQ:TSLA), and oil producers that derive large portions of their revenues from shale production took heavy losses. Trading volume was elevated at 121% of the 10-day average. The S&P 500 closed down 1.31%, and all 10 basic sectors showed losses.
Twitter (NYSE:TWTR) opened for trading on the New York Stock Exchange in the late morning. The stock opened for trading at $45.10 after pricing its IPO at $26. The opening price implies a market cap of ~$31.5 billion. The stock broke above $50 at one point during the day, but settled near its opening price of $45.10 by the end of the day’s trading.
Tomorrow's Financial Outlook
Tomorrow morning the US will release non-farm payroll growth for October. Economists expect non-farm payroll growth of 120,000 in the month. The prior three months have averaged 145,000 in payroll gains. The report is expected to show fewer gains because of government contractor layoffs. Because federal workers received back pay, the Bureau of Labor Statistics will not count them as lost jobs.
The September personal income and spending reports will also be out in the morning. Due to slowdowns in auto and retail sales, spending is only estimated to grow 0.3% from the prior month.
Global economic data will be light after a very busy week. The UK will release its September trade data, and Canada will release housing starts.
Only three major US companies will report earnings tomorrow: Lions Gate (NYSE:LGF), Cablevision (NYSE:CVC), and Leap Wireless (NASDAQ:LEAP).
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