Facebook’s $5bn IPO filing was a fillip for recently debuted internet businesses.
The Nasdaq Composite climbed 0.4 per cent to 2,859.68, handily outperforming other big US indices as stocks from Chinese social network Renren to offers website Groupon surged.
Zynga benefited the most. Shares in the social-game developer climbed as much as 20 per cent to hit an all-time high of $12.91 before closing at $12.39, a gain of 16.8 per cent.
That came after Facebook’s filing revealed Zynga accounted for 12 per cent of Facebook’s 2011 revenue, up from 10 per cent in the prior two years. Zynga shares ended the day comfortably above their $10 IPO price, for the first time since the company’s own stock market debut in December.
But other moves appeared to have little to do with any Facebook-specific information.
Professional networking website LinkedIn climbed 8.2 per cent to $76.87, Groupon climbed 7.4 per cent to $23.08 and Renren was up 8.2 per cent to $5.42. SINA, a Chinese social-media company, which owns a Twitter-like service, climbed as much as 5 per cent before closing up 1.9 per cent to $75.30.
“This rally is really all about sentiment,” said Herman Leung, a tech analyst at Susquehanna. “We’re seeing big share price moves for anything with a whiff of social about it on no real news, while old school internet companies underperform.”
Yahoo slipped 0.1 per cent to $15.72 and Google climbed 0.7 per cent to $585.11.
Elsewhere, US stocks were generally flat with the S&P 500 inching up 0.1 per cent to 1,325.54.
The Dow Jones Industrial Average fell 0.1 per cent to 12,705.41, as Pfizer fell 0.9 per cent to $21.11 after the drug maker recalled 1m packets of birth control pills amid fears that faulty packaging could potentially lead to unwanted pregnancies.
Merck shares also fell 0.5 per cent to $38.44 although Pfizer’s rival swung to a fourth-quarter profit, beating analyst expectations. The second-largest US drug maker by revenues predicted a relatively flat 2012, with profits expected to be hit by cheaper generic forms of its biggest product, asthma drug Singulair.
Retail stocks were volatile as clothing stores updated investors on fourth-quarter expectations.
Shares in Abercrombie & Fitch slumped 13.7 per cent to a 52-week low of $40.40, as the clothing store warned fourth-quarter profit will come in well below expectations.
The company said sales growth of 16 per cent in the quarter ended January 28 was driven almost exclusively by new store openings, as same-store sales came in flat.
Rival clothing company Gap jumped 10.6 per cent to $21.52, despite forecasting a fall in same-store sales across its brands of 4 per cent and a 2 per cent fall in overall sales. Analysts had been braced for much worse, but sales at Banana Republic stores surprised on the upside.
However, Robert Drbul at Barclays Capital noted that apparel, footwear and textiles stores underperformed the S&P 500 in January, while, “exposure to Europe remains a concern given the soft macroeconomic environment”.
Earnings were responsible for other big movers, with JDS Uniphase falling 7.2 per cent to $12.19 even though quarterly earnings came in better than expected as the fibre optics manufacturer recovered strongly from supply-chain disruption in Thailand.
Nikos Theodosopoulos at UBS downgraded JDS to “neutral” from a “buy” recommendation, telling clients that, “while orders looked good we struggle to place a higher than 15 [times earnings] multiple on JDSU’s cyclical business.”
Qualcomm shares climbed 2 per cent to $60.73 as strong sales of smartphones drove demand for its wireless networking products, helping deliver better than expected fiscal first-quarter results and strong guidance for 2012.
“A healthy market, ongoing share gains and conservative guidance should yield further upside in the shares,” said Jeff Kvaal at Barclays Capital.
CME Group rose 8.4 per cent to $257.13. The largest US exchange group by market capitalisation said fourth-quarter profit rose, with a tailwind from an Illinois tax benefit. Meanwhile NYSE Euronext rallied 1.9 per cent to $26.94 after retreating on Wednesday, as the European Commission blocked its proposed merger with Deutsche Börse.
Electronic Arts gained 6.1 per cent to $19.57 after the second-largest US video-game publisher reported a 70 per cent increase in third-quarter profit.
MasterCard shares, which climbed 66 per cent in 2011, were on the move again, gaining 6.7 per cent to $381.57. The credit-card company delivered strong earnings, once a $495m after-tax charge against litigation was stripped out of fourth-quarter numbers.
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