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Tesla revs, Facebook buys Whatsapp, Stocks slide

Wednesday, Feb 19, 2014 - 02:13

Feb 19 - Summary: Stocks suffer late-day thump; Tesla pumps up production on model S; Facebook buys Whatsapp in biggest acquisition yet; Fed wanted to send clear tapering signal at last meeting; housing starts slump by most in three years. Conway G. Gittens reports.

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Wall Street fluctuated before and after minutes from the Federal Reserve's January meeting were released, but settled with a loss; the Nasdaq ending an eight-day winning streak. More on the Fed later, but first Tesla. The electric car company can't make its flagship model S fast enough to meet demand, leading to much better-than-expected net profits. Shares of Tesla jumped to a new high after-hours, following a decline during the regular session. Facebook is buying Whatsapp in a deal totalling $16 billion. This is Facebook's biggest purchase. The popular messaging start-up Whatsapp says it has over 450 million monthly users. Minutes from Ben Bernanke's last meeting as head of the Federal Reserve show some policymakers wanted to send a clear message that they would stick to the plan of reducing extra stimulus by $10 billion at each meeting unless the "economy substantially deviated from expectations." But Gus Faucher of PNC Financial says weather will make it hard for the Fed to know what's really going on by the time of their next meeting. SOUNDBITE: GUY FAUCHER, SENIOR ECONOMIST, PNC FINANCIAL SERVICES (ENGLISH) SAYING: "They will have the February employment report but the week of the survey that that is taken, that was a week of bad weather in the U.S., so I think job growth is likely to be soft again in February. So the Fed is going to have to try and figure out what's going on, how much of it is due to weather effects, how much of it is due to seasonal adjustment factors and how much is due to underlying problems in the economy?" For example: January Housing starts tumbled by the biggest amount in three years. But permits for future building fell for a third month in a row, causing concern the weakness may actually be more than just weather. The Fed, however, does not have to worry about inflation. Producer prices rose only 0.2 percent at the start of the year. Meanwhile, frigid temperatures are draining heating supplies. Crude oil closed at a four-month high above $103 a barrel. Signet, the parent of Kay Jewelers, rising 18 percent and Zale surging 40 percent. The two mid-tier jewelry store chains are tying the knot in a $690 million deal. In Europe: eyes continue to watch the deadly violence in the streets of Ukraine where fires burn for a second night. As for markets- stocks shed losses to barely finish the day in the green.

Tesla revs, Facebook buys Whatsapp, Stocks slide

Wednesday, Feb 19, 2014 - 02:13

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