Internet Stocks Rebound After 3-day Selloff
US stocks edged higher Friday afternoon, bouncing back from earlier losses this week, while Merck and other healthcare names also gained ground.
Friday, May 9, 2014 - 00:00
The S&P has alternated between gains and losses each day this week, and the Nasdaq has dropped for three straight sessions - its longest losing streak since early April - as internet related stocks came under pressure. Small-caps and internet shares such as Facebook and Amazon. have been the biggest victims of the market retreat that began two months ago as investors fled last year’s best-performing equities. As of 3PM in New York, the Dow had risen 31.63 points to 16,582.6, the S&P had gained 1.95 points to 1,877.58 and the Nasdaq added 11.883 points to 4,063.379.
The Russell 2000 made up of small-cap companies also turned positive and was last up 0.6%. Earlier, it touched correction territory according to analysts with a 10% drop from its March 9 high. A drop of that magnitude on a closing basis could spark more investor caution. The Russell 2000 has fallen 8.8% from a March 4 record amid concern that prices have outrun earnings. This sentiment is the undercurrent du jour of the indices-based trader.
In other high-tech news, what would be the largest-ever purchase by the iPhone maker, Apple is in advanced talks to acquire headphone maker and music-streaming service Beats Electronics LLC for $3.2 billion, people with knowledge of the matter said. The deal for the Santa Monica, California-based company, which was founded by music-industry executive Jimmy Iovine and hip-hop artist Dr. Dre (who tweeted about the deal saying “the first billionaire in hip-hop, right here”) would bolster Apple’s online music capabilities by giving it ownership of the Beats Music service that started earlier this year. For $10 a month, subscribers get unlimited access to all of the songs in the service’s catalog through a smartphone, tablet or Web browser. It seems as if the age of digital downloads is over, as cloud access to essentially the universe of music is increasingly possible through a streaming service.
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