* Twitter opens at $45.10, rallies on heavy volume
* ECB interest-rate cut a surprise
* U.S. GDP tops expectations as inventories rise
* Qualcomm falls after results, outlook
* Indexes down: Dow 0.5 pct, S&P 0.8 pct, Nasdaq 1.4 pct
By Luke Swiderski
NEW YORK, Nov 7 Frenzied buying in Twitter
shares dominated Wall Street's attention on Thursday, as the
social media stock surged well above expectations, while major
averages fell, led by the Nasdaq.
The broader market was hurt by weak earnings from Whole
Foods and Qualcomm. The European Central Bank's decision to cut
interest rates helped offset some of the negativity, however,
said Randy Frederick, managing director of active trading and
derivatives at Charles Schwab in Austin, Texas.
"My expectation was that there would be some profit-taking"
after markets made gains on Wednesday, he said.
Shares of Twitter surged 77 percent to $45.98 from
its $26 IPO price, after at one point reaching $50.09 a share.
"This crowns Twitter probably as the most expensive IPO on a
price-to-sales metric ever," said Channing Smith, managing
director at Capital Advisors in Tulsa, Oklahoma. "With this
multiple, you're leaning on everything going right," Smith said.
The rest of the market was more downbeat. Qualcomm
shares fell 4.6 percent to $66.59, the biggest drag on both the
S&P 500 and Nasdaq 100 indexes after the company forecast
revenue below expectations.
The Nasdaq was the weakest of the major indexes, led lower
by a 9 percent drop in Whole Foods after its results on
Wednesday, while Tesla Motors continued its slide,
dropping 5.8% percent one day after a big fall on lackluster
earnings and on reports of a third car fire. The stock remains a
favorite among short-sellers who believe it is overvalued.
The Dow Jones industrial average fell 81.69 points or
0.52 percent, to 15,665.19, the S&P 500 lost 13.8 points
or 0.78 percent, to 1,756.69 and the Nasdaq Composite
dropped 52.975 points or 1.35 percent, to 3,878.971.
Stock futures had jumped early in the day after the European
Central Bank cut interest rates, responding to a slump in
inflation that sparked fears the euro zone's economic recovery
could stall. The ECB move reinforced expectations global central
banks will continue to buoy struggling economies.
Separately, data showed that the U.S. economy grew 2.8
percent in the third quarter, but that estimate, which will be
revised, was affected by a larger-than-expected build-up of
inventories, which tends to subtract from growth later on.
Initial jobless claims fell 9,000 to a seasonally adjusted
336,000 last week, roughly in line with expectations.
Those reports, as well as Friday's much-anticipated jobs
numbers, will give investors some insight into how long the Fed
will keep buying $85 billion a month in bonds. The central
bank's stimulus has been a key component of the 24.1 percent
year-to-date gain in the S&P 500, putting the index on pace for
its best yearly performance since 2003.
Meanwhile, trading in about 10,000 "penny stocks" was halted
on the OTC Bulletin Board by self-regulatory organization FINRA
due to connectivity issues. Most issues traded on OTC are
illiquid, trading infrequently, and at prices lower than $1.
NYSE and Nasdaq securities were not affected.