Wednesday's Business Highlights
For Oct. 23, 2013
Thursday, October 24, 2013
Twitter sets $17 to $20 per share range for IPO
NEW YORK (AP) — Twitter set a price range of $17 to $20 per share for its much-anticipated initial public offering and says it could raise as much as $1.6 billion in the process.
The company said in a regulatory filing Thursday that it is putting forth 70 million shares in the offering. If all the shares are sold, the underwriters can buy another 10.5 million shares.
At the $20 share price, Twitter’s market value is around $12.5 billion. That’s based on 625.2 million outstanding shares expected after the offering, including restricted stock units and stock options.
Twitter’s valuation is relatively conservative — some analysts had expected the figure to be as high as $20 billion.
The caution shows that Twitter learned from Facebook’s rocky initial public offering last year. Rather than set expectations too high, Twitter is playing it safe and will very likely raise its price range closer to the IPO, and thus fuel demand.
Higher profits from Ford, others drive stocks up
NEW YORK (AP) — Another dose of strong corporate earnings, this time from Ford, Southwest Airlines and others, helped push the stock market higher on Thursday.
It’s one of the busiest weeks on Wall Street for companies posting their quarterly results. Roughly a third of the Standard & Poor’s 500 index will report earnings, including some of the world’s best-known companies.
For investors, this week has also been a welcome return to business as usual. Wall Street has been focused for weeks on what’s going on in Washington, with the government shutdown, the near-breach of the nation’s borrowing limit and questions about what’s next for the Federal Reserve’s massive bond-buying program.
Fed proposes big banks hold more cash, assets
WASHINGTON (AP) — The Federal Reserve on Thursday proposed that big banks keep enough cash, government bonds and other high-quality assets on hand to survive during a severe downturn on par with the 2008 financial crisis.
The proposal subjects U.S. banks for the first time to so-called “liquidity” requirements, referring to the ability to access cash quickly.
Fed Chairman Ben Bernanke said it would foster a more resilient and safer financial system, along with other reforms.
US unemployment aid applications drop to 350,000
WASHINGTON (AP) — The number of people seeking U.S. unemployment benefits dropped 12,000 to a seasonally adjusted 350,000 last week, though the total was elevated for the third straight week by technical problems in California.
The Labor Department said Thursday that the less volatile four-week average jumped by nearly 11,000 to 348,250.
Weekly applications have been inflated for the past three weeks, largely because California has been processing a huge number of applications that were delayed because of a computer upgrade. The 16-day partial government shutdown has also lifted claims this month because a number of government contractors were laid off temporarily.
A government spokesman said the backlog in California affected last week’s figures but noted shutdown’s impact appears to be fading.
Average US rate on 30-year mortgage at 4.13 pct.
WASHINGTON (AP) — Average U.S. rates on fixed mortgages dropped this week to their lowest levels in four months, a positive sign for the housing recovery.
Mortgage buyer Freddie Mac says the average rate on the 30-year loan fell to 4.13 percent. That’s down from 4.28 percent. The average on the 15-year fixed loan declined to 3.24 percent from 3.33 percent. Both averages are the lowest since June 20.
Mortgage rates have been falling since September, when the Federal Reserve held off slowing its $85-billion-a-month in bond purchases. The bond buys are intended to keep longer-term interest rates low, including mortgage rates. And a slowdown in hiring in September makes it more likely that the Fed will continue its stimulus into next year.
Civil rights group seeks meeting with Barneys CEO
NEW YORK (AP) — A civil rights group said Thursday it was seeking a meeting with the CEO of Barneys New York in the wake of racial profiling claims by two shoppers at the high-end department store.
The Brooklyn chapter of the Rev. Al Sharpton’s National Action Network said the group also plans to picket Barneys if the alleged pattern of racial profiling does not stop, its president, Kirsten John Foy, said in a statement.
Two black shoppers this week accused Barneys of detaining them after they made expensive purchases at the store in Manhattan. One of them has filed a discrimination lawsuit against Barneys, the city and its police department; another filed a complaint with the city’s police watchdog agency.
The Dow Jones industrial average rose 95.88 points, or 0.6 percent, to close at 15,509.21 Thursday. The Standard & Poor’s 500 index rose 5.69 points, or 0.3 percent, to 1,752.07. The Nasdaq composite rose 21.89 points, or 0.6 percent, to 3,928.96.
Benchmark U.S. crude for December delivery gained 25 cents to close at $97.11 a barrel on the New York Mercantile Exchange. Wholesale gasoline added 4 cents to $2.59 a gallon. Natural gas rose 1 cent to $3.63 per 1,000 cubic feet. Heating oil shed 2 cents to $2.90 a gallon. Brent crude fell 81 cents to $106.99 a barrel on the ICE futures exchange in London.
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