Twitter and Facebook Stumble, While Delta Deals With Computer Glitch

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

After a six-day rally, the major indexes calmed down today. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) closed lower by one point, or 0.01%, and now sits at 16,478. The other major indexes didn't perform any better as the S&P 500 lost 0.03%, and the Nasdaq closed off by 0.25%. Without a major catalyst to move stocks higher today, it seemed investors were content taking the day easy after the major indexes had rallied the previous six sessions. With limited economic data being released today, individual stocks moved largely on their own news or industry-wide events. Let's take a look at a few of today's losers that put downward pressure on the major indexes.

Shares of the social networking site Twitter (NYSE: TWTR  ) ended the day off by more than 13% today. The move came after the stock was downgraded by analyst at Macquarie Securities. The analyst believes the stock was overvalued heading into today, and lowered the rating from neutral to underperform. Furthermore, the firm's price target of $46 remained the same, and Ben Schachter, the analyst, stated that he didn't feel anything fundamental has changed with the company recently to cause the share price to rally like it has. Heading into today, Twitter was up more than 22% this week alone, which really consisted of two-and-a-half days of trading. Investors need to be careful with this one, as it would have seemed that, heading into today, the bullish momentum had taken over and the stock was trading purely on speculation. 

Shares of Facebook (NASDAQ: FB  ) also lost ground today, closing down 3.97% on very little news. Shares are up more than 122% during the past 52 weeks, which easily beats the Dow's 25% return, or the S&P 500's 31% gain. But today's decline could have been a combination of investors closing out the position before the end of the year, and a side effect from the Twitter move. Sometimes, traders, not investors, will sell competitors or a whole industry when one company is having a bad day.

Outside the social media world, shares of Delta Air Lines (NYSE: DAL  ) traded lower by 3.05%. The fall comes after the company had a computer glitch yesterday morning for a few hours, during which time, customers could book airline tickets for extremely cheap rates. One customer got a roundtrip ticket to Hawaii for $6.99; another got a $12.83 first-class ticket from Oklahoma City to St. Louis; while another customer got a $132 ticket from Houston to San Francisco -- which is not a great price until you consider that it's a first class ticket. The airline has not reported how many tickets were sold, and what it ultimately will cost the company, but investors seem to believe that it will show up on the quarterly statement. This is a short-term problem, and current shareholders shouldn't sell due to this issue. 

More Foolish insight

There's a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2777869, ~/Articles/ArticleHandler.aspx, 11/26/2014 8:45:11 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement