NEW YORK Twitter will be the talk of Wall Street next week when the social media company goes public in the stock market's most anticipated initial public offering since 2012's Facebook (FB.O).
Twitter is expected to price its IPO on the evening of November 6 and begin trading November 7 on the New York Stock Exchange under the symbol (TWTR.N).
"It's not just about the stock. Twitter's IPO will be a measure of how much liquidity is out there," said John Rutledge, chief investment strategist at SAFANAD, a private investment firm in New Canaan, Connecticut.
Twitter has said it will sell 70 million shares at a price between $17 and $20, valuing the online messaging company as much as $11 billion, below the $15 billion that some analysts had been expecting.
FACEBOOK'S IPO FATE
The market will be on alert to see if Twitter follows the fate of last year's botched Facebook Inc (FB.O) IPO: the social networking company's stock hit the market in May 2012 and was plagued by allocation problems, trading glitches and a selloff. The shares did not recover the IPO price until a year later.
Views have been mixed on what investing strategy to take for Twitter's IPO. According to a Reuters survey of 29 broker-dealers and independent advisers, 23 said they are not recommending Twitter shares. Only one said he would recommend it - and only to certain clients. Five others said they would wait to snap up the stock if it plunges after it begins to trade.
But while retail interest might be low, tech industry analysts say there is expected to be a good appetite for Twitter's stock from institutional investors at the current valuation.
On Friday, Morningstar joined three other brokerages in setting price targets for Twitter Inc well above its IPO price range, suggesting the stock has room to rise at least 30 percent.
The Wall Street brokerages set a price target of $26 a share. Last month, Pivotal Research had set its price target at $29 a share, SunTrust at $50 and Topeka Capital at $54.
GOV'T SHUTDOWN IMPACT
Another event that will grab investors' attention will be the Labor Department's release of non-farm payroll figures for October on November 8. The announcement was delayed by the 16-day partial U.S. government shutdown in early October. Some market participants warn that the data could be skewed due to the shutdown.
"It's hard to have a takeaway for the markets because we're at a point in time where we have to take all the data with a bit of a grain of salt. Some of it is old, some may not be affected by the shutdown yet," said Art Hogan, managing director at Lazard Capital Markets in New York.
On Friday, the Institute for Supply Management's index of national factory activity was not affected by the government shutdown, showing the best reading since April 2011.
"This was supposed to be a government shutdown-affected number, and it certainly didn't show that," Hogan said.
For the week, the Dow rose 0.3 percent and the S&P 500 gained 0.1 percent, while the Nasdaq slipped 0.5 percent.
But beyond the factory data, the government shutdown did appear to dampen consumers' appetite for new cars last month. Seven of the top eight automakers reporting monthly sales on Friday missed analysts' expectations.
Next week's economic indicators also include factory orders on Monday, followed by the ISM services index on Tuesday. On Thursday, third-quarter gross domestic product and weekly jobless claims will be released. In addition to the unemployment numbers, U.S. personal income and outlays and the Thomson Reuters/University of Michigan consumer sentiment index are due on Friday.
EARNINGS SEASON CONTINUES
Earnings will also be in focus. So far, out of the 74 percent of S&P 500 companies which have reported, 68.5 percent have topped Wall Street's expectations, above the long-term average of 63 percent. But just 53.3 percent have topped revenue forecasts, below the 61 percent average since 2002, Thomson Reuters data showed.
After the Nasdaq OMX Group Inc (NDAQ.O) closed its second largest options market for much of Friday due to a technical glitch, many investors will be watching whether the operations will fully resume on Monday.
The Nasdaq Options Market, which accounted for around 8 percent of U.S. options volume last month, was halted at 10:36:57 a.m. EDT (1436 GMT) and remained shut through the rest of Friday. While the halt had a minimal effect on the options markets, it was the latest in a series of industry mishaps have raised concerns about infrastructure.
(Additional reporting by Rodrigo Campos; Editing by Kenneth Barry)