Twitter and Tech Stocks Soar, DirecTV Spikes, and Chiquita Looks Slippery

The Dow Jones Industrial Average (DJINDICES: ^DJI  )  rose 112 points and the S&P 500 gained 18 as both stock market indices reached record highs on a quiet start to the week.

1. Tech stocks go nuts despite quiet market
Among the cricket-chirping on the floor of the New York Stock Exchange (no big data releases, no huge earnings releases, and no news of having Facebook do something crazy with its billions of excess cash), tech stocks rebounded from their recent whacking. Twitter (NYSE: TWTR  ) , Facebook, and Amazon.com all rose at least 3.6%. 

What was the cause of the rebound? These stocks rose despite low trading volumes and no big news, prompting analysts to credit hedge funds for the movement. Hedge funds trade for a living, and after the major losses tech stocks have taken over the past month, firms are ready to buy back into the cheaper stock price.

Twitter climbed the most with a 5.9% rise, because it got a stock rating upgrade from Georgia-based SunTrust investment bank. After debating what bulldog was the best ever mascot for the University of Georgia, SunTrust analysts supposed that the recent sell-off of Twitter went too far, and so it recommended to its clients to buy the stock.

2. DirecTV spikes after AT&T acquisition rumors
According to company insiders that leaked rumors to The Wall Street Journal, communications giant AT&T (NYSE: T  )  is adding DirecTV (NASDAQ: DTV  )  to its family plan. The deal could be announced in as soon as two weeks.

Like any wise subject of rumors, both companies declined to comment publicly. But if you're trying to trade stocks based on official announcements only, then you're going to get burned. Savvy traders make moves on rumors like these to snatch the stock at a cheaper price before the rest hear about the big news. DTV is trading up over 5% since the article hit the wire.

AT&T needs video to keep profiting off what people are demanding, and DirecTV needs better broadband Internet infrastructure. So it's a perfect match. The big question is what combination of debt and new stock AT&T needs to issue to raise the necessary cash. Reports say that the deal could value DirecTV at $50 billion, so DTV's stock price is rising in anticipation of the big buyout for shareholders.

3. Chiquita earnings get frozen
Just in time for our favorite part of the year, smoothie season, your favorite childhood banana distributor, Chiquita Brands (NYSE: CQB  ) , reported first-quarter earnings on Friday that investors (figuratively) threw bananas at. Revenue for the first three months of 2014 fell 2% from the same period the previous year, to $762 million.

Frozen bananas are great for the Bluth Frozen Banana Stand in Arrested Development, but not so good for most consumers' banana-related needs (like, say, eating room-temperature bananas). The frigid U.S. winter and drought conditions in Central America forced Chiquita to purchase more expensive fruit to meet contract obligations with its business customers, such as grocery stores.

The takeaway is that investors sold down Chiquita stock Friday but bought shares back up 0.7% Monday because Chiquita's making some big changes. By the end of the year, Chiquita plans to complete a $1.07 billion stock deal to merge with Ireland's fruit distributor Fyffes to better avoid "banana supply volatility." Unfortunately, the new name will boringly just be ChiquitaFyffes.

As originally published on MarketSnacks.com

Will this stock be your next multi-bagger?
Give us five minutes and we'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with amazing potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303%! You don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.


Read/Post Comments (0) | Recommend This Article (1)

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: 2954525, ~/Articles/ArticleHandler.aspx, 10/30/2014 9:46:05 AM

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