Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Alibaba IPO, iPhone 6 Run Straight Into Market Volatility

By

Today's financial recap and tomorrow's financial outlook.

PrintPRINT

Today was a big day for the tech space.

Alibaba (BABA) priced its IPO at $68 per share, the high end of the expected range. That turned out to be a bargain price for those who received allocations of the deal, as Alibaba opened for trading at $92.70 before closing at $93.89 The company now has a larger market capitalization than major tech names like Amazon.com (AMZN) and Cisco Systems (CSCO).

Other Chinese Internet stocks were weak on the day, and the Guggenheim China Technology ETF (CQQQ) sagged 0.9%.

Yahoo! (YHOO), which owns a significant stake in Alibaba, had a sell-the-news reaction to the IPO, falling 2.7% to $40.93. Yahoo! shares had sharply this past summer on anticipation of the deal.

Apple (AAPL) released its new iPhone 6 and iPhone 6 Plus today. Media reports indicated strong demand retail outlets around the world, but the stock declined 0.8%.

And as we saw with Alibaba and Yahoo!, related names took a hit. Several Apple suppliers, including Cirrus Logic (CRUS) and Invensense (INVN) sold off.

In earnings, Oracle (ORCL) dropped 4.2% after reporting weaker-than-expected fiscal first-quarter results after the close Thursday. The company also announced the transition of founder and CEO Larry Ellison to a new role as executive chairman and chief technology officer. Oracle executives Mark Hurd and Safra Catz will share the CEO role going forward.

Taking a look at the broader action, the market was in a good mood in the early going. Scottish voters voted against independence from the United Kingdom, which drove a modest 0.27% gain in the FTSE 100.

US stocks did even better at the open, with the S&P 500 (SPX) shooting up to a new all-time high at 2019.26 less than ten minutes into the trading session.

However, traders quickly took a risk-off posture, with small caps, transports, and biotech names rapidly retreating while bonds and utility stocks rose.

The S&P fell as low as 2006.59, but made up some of the dip by the close, finishing at 2010.40, essentially flat. That rebound was largely confined to the large caps. For example, the Russell 2000 fell 1.1% on the day, and the iShares MSCI Emerging Markets ETF (EEM) was down 0.8%.

Some of the volatility may have also been caused by today's quadruple witching expiration, as well as S&P's quarterly rebalancing.

Economic data was light today. Indicators for August were up 0.2% for August, missing the 0.4% consensus. However, July's reading was revised up to 1.1% from 0.9%.

Monday's Financial Outlook

Existing Home Sales data for August will be released at 10:00 a.m. ET. The consensus estimate is 5.2 million.

The only big name reporting earnings is AutoZone (AZO), which will release its fiscal fourth-quarter results before the open.

Tech investors are eager for Apple's announcement for opening weekend iPhone sales. The consensus view seems well-represented by Citigroup analyst Jim Suva who said today that "demand is off the charts", with supply constraints the likely limiting factor.

Overall, the strong US dollar and weakness in small caps hasn't shaken up the bulls, but these areas should be watched as they could be early warnings of future weakness in equities.

Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.

< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE