Why Facebook, Yelp, and Caesars Entertainment Jumped Today

The stock market soared after the Federal Reserve's latest minutes boosted investors' spirits. Find out more about what made these three stocks soar.

Apr 9, 2014 at 8:02PM

On Wednesday, stocks pressed sharply higher, with morning gains getting an additional boost when the Federal Reserve's latest meeting minutes were released during the afternoon. After last month's meeting, investors were afraid that interest rate increases would come quickly and furiously, but the minutes showed every intention of trying to reassure the markets that increases would be measured and deliberate. That sent most major stock market benchmarks up 1% to 2% and buoyed the shares of Facebook (NASDAQ:FB), Yelp (NYSE:YELP), and Caesars Entertainment (NASDAQ:CZR).


Facebook gained 7%, hitting its best level since late January after the social-media stalwart climbed in the general move toward higher-growth stocks. Moreover, Facebook also benefited when COO Sheryl Sandberg said in an interview that she did not plan to go into politics, reassuring investors who consider her partnership with CEO Mark Zuckerberg to be an essential part of Facebook's success strategy. With Facebook also having said that it would make a shift to display larger ads on its desktop version, investors believe that the social-media company is poised to make even more money from its growing membership.

Yelp rose 6% after receiving an upgrade from an analyst firm this morning. With its announcement last night that it's launching Yelp Japan and extending its reach into the lucrative Asian market, Yelp hopes that it will be able to build a worldwide network of reviews and travel information for consumers across the globe. The company has been somewhat slow to target Asia for growth, with only a presence in Singapore before last night's announcement. But with the company having solved the challenge of offering a non-Roman-character language, Yelp might well look to expand more broadly into other regional leaders like China and Korea.

Caesars Entertainment rose more than 9% even after the casino operator got a credit-rating downgrade. With one rating agency noting that Caesars is running through its available cash at an alarming rate, investors are realizing that Caesars will have to come up with a capital restructuring at some point. Apparently, though, the hope among shareholders is that they'll be able to negotiate a favorable deal against bond investors in other stakeholders in Caesars, or else today's surge wouldn't make sense. One other possibility is that bond investors are hedging bearish distressed-debt positions by buying stock, effectively giving themselves a call option on the company's success in case their bearish positions turn out to be wrong.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Facebook and Yelp and owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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