Twitter's long-awaited first day of trading is here, and it's a success, with the company's first trade more than 73% above its offering price.
NEW YORK -- Stocks took a beating Thursday despite a bullish start for Twitter's highly anticipated first day of trading.
Shares of the social networking company jumped 73%, rising $18.90 to close at $44.90.
The micro-blogging service, trading under the TWTR symbol, priced its shares at $26 each on Wednesday. The stock's first trade, which came a little before 11 a.m. ET Thursday, was at $45.10, and shares rose as high as $50.09.
Despite the Twitter hype and sharp climb, the Dow Jones industrial average index fell 152.90 points, or 1%, to 15,593.98. The Standard & Poor's 500 index dropped 23.34 points, or 1.3%, to 1,747.15 and the Nasdaq composite index tumbled 74.61 points, or 1.9%, to 3,857.33.
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Other stocks in the social media and tech space got clobbered. Social media giant Facebook fell 3.2% to $47.56. LinkedIn, a professional social media site used by job hunters, fell 4.2% to $211.47. Restaurant search play Yelp was off 7.2% to $61.83. Zynga, the game app firm, was off 6.6% to $3.46. And daily-deal site Groupon dropped 5.1% to $9.50.
On Wednesday, the Dow climbed 0.8% to a record high of 15,746.88, the S&P 500 rose 0.4% to 1,770.49 and the Nasdaq ended down 0.2% to 3,931.95.
Woody Dorsey, president of Market Semiotics, a firm specializing in investor psychology, says the stunning first day gain shows that "Twitter is an accessory to market froth."
In economic news, the government reported that that the economy grew at a 2.8% clipin third quarter, far above the 2% growth analysts polled by Bloomberg News expected and better than the 2.5% growth rate in the second quarter.
Initial jobless claims fell 9,000 to 336,000, suggesting continued improvement in the U.S. labor market amid a slowly improving economy.
The better-than-expected economic news made investors think the Fed could start cutting back its stimulus next month, earlier than many anticipated.
It "certainly raises the possibility of the Fed pulling back in December," said Peter Cardillo, chief market economist at Rockwell Global Capital. "The Fed is going to test the water."
The Fed is buying $85 billion of bonds every month to hold down interest rates and encourage hiring and borrowing. The program has had a secondary effect in helping boost stock prices, because the program makes bonds more expensive by comparison.
The ECB cut a key interest rate to 0.25%, a record low, from 0.5%, at the conclusion of its policy meeting Thursday to shore up a recovery from recession and combat a sharp drop in inflation.
The major European benchmarks, which were trading mostly flat before the ECB's surprise rate cut, briefly rallied on the news before pulling back. Germany's DAX 30 index rose 40.16, or 0.4% to close at 9,081.03. But stocks in the U.K. and France closed lower. France's benchmark CAC 40 fell 5.94, or 0.1%, to 4,280.99 and Britain's FTSE 100 index dropped 44.47, or 0.7%, to 6,697.22.
In the commodities market, benchmark crude oil prices for December delivery were down 55 cents at $94.25 in electronic trading on the New York Mercantile Exchange. The contract rose $1.43 to close at $94.80 a barrel on Wednesday.
Asian stock markets were mostly weaker Thursday, with a cautious mood prevailing ahead of key U.S. data that will provide further clues on when the Federal Reserve will cut monetary stimulus. The Nikkei 225 index fell 0.8% to 14,228.44 in Japan.
Among other stocks making big moves:
• J.C. Penney rose 43 cents, or 5.6%, to $8.13. The company said that a key sales barometer rose in October for the first time in nearly two years. The company's stock is still down 58% this year.
• Shares of the carmaker Tesla Motors fell $11.25, or 7.4%, to $139.91 as a Tesla Model S electric car caught fire this week after hitting road debris on a Tennessee freeway, the third fire in a Model S in the past five weeks.
• Whole Foods Market plunged $7.21, or 11.2%, to $57.26 after the company cut its outlook for sales growth and earnings for its next fiscal year.
• Qualcomm fell $2.65, or 3.8%, to $67.09 after the chip maker's earnings fell short of Wall Street's forecast.
Contributing: Associated Press
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