The Dow Jones Industrial Average (DJINDICES:^DJI) was down slightly today, shedding about 50 points as of 11:30 a.m. EST. There was no major economic news in the U.S. to account for the sell-off, but weakness in Europe may have carried over to stocks here.
In the U.K., unemployment came in better than economists had expected, while the head of the Bank of England, Mark Carney, hinted at a possible interest-rate increase. With the specter of more central-bank support subsiding, the U.K.'s FTSE 100 fell more than 1.3%.
Among U.S. stocks, there are a few notable performers. Dow component Verizon Wireless (NYSE:VZ) has fallen more than 1%, while recent hot IPO Gogo (NASDAQ:GOGO) continues to surge. CHEGG (NYSE: CHGG) has plunged in its trading debut.
Verizon admits network overload
Shares of Verizon Wireless are among the Dow's worst performers today after Verizon admitted that its 4G network was over capacity in some major markets like New York and San Francisco, forcing some subscribers to use 3G connections.
Verizon is known for having the best network of any of the major U.S. mobile carriers, and it generally charges customers a premium for the service. Any implications that its network is substandard could lead to a loss of subscribers or a failure to capture new ones. Still, the damage should be limited; Verizon said it will have the problem fixed by the end of the year.
For use on its network, Verizon has introduced its own tablet, the Ellipsis 7. Compared to competitors like the Nexus 7, Verizon's tablet is overpriced, with fewer features and worse specs. Still, with Verizon blocking access to the Nexus 7 on its network and likely using its sales staff to push the tablet to unsuspecting customers, selling its own hardware could add to Verizon's bottom line.
Gogo is now up more than 45% in the last 5 days
Verizon's 4G network is useless in airplanes, so that's where Gogo comes in, providing in-flight wireless Internet for a fee. Shares of Gogo have been on a tear since the company went public in June and are up more than 45% in just the last five days!
The rally was initially prompted by a better-than-expected earnings report but has continued despite a couple of analyst downgrades. Most recently, CNBC's Jim Cramer recommended the stock, giving it a buy rating. Cramer's call, combined with continuing momentum, is likely behind Gogo's move to a new record high.
CHEGG drops on trading debut
In contrast to Gogo's tremendous post-IPO performance, CHEGG is doing decidedly worse. The company, which specializes in renting out textbooks to college students, priced its IPO at $11.50, but as of this writing it's trading near $10.60, down about 15%.
CHEGG's performance stands in stark contrast to Twitter, which nearly doubled on its first day of trading last week. Like Twitter, CHEGG isn't profitable, but evidently, investors aren't giving it the same benefit of the doubt. Fears of a student loan bubble may be limiting CHEGG's upside -- the company campaigned against increasing rates on federal student loans, as its business is directly tied to the college industry.