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Dow hits record close, momentum rebounds

Friday, May 09, 2014 - 02:00

May 9 - Summary: Blue chips closed at a record high boosted by Merck's drug approval; Momentum players like Netflix, Twitter, and Tesla rebound; Netflix boots membership fee; Apple investors pan Beats rumors. Conway G. Gittens reports.

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Blue chips nudged up to a record close in a modest last-minute push across the finish line. The Dow is up three days in a row, while the Nasdaq ended its longest losing streak since April. For the week: Blue chips up less than half a percent, while the Nasdaq gave back 1.3 percent. Wall Street didn't like the idea of Apple shelling out a record $3.2 billion for Beats Electronics. Sources say the two are near a deal, but neither side confirmed. Some analysts question whether Beats was worth that price. The headphone maker, which recently launched a streaming music service, was valued at $1 billion during its last funding round in September. Some wonder: why not buy Spotify or Pandora? In the end, the possibility of this deal exposes Apple's weakness, says digital music expert Aram Sinnreich. SOUNDBITE: ARAM SINNREICH, MEDIA PROFESSOR, RUTGERS UNIVERSITY (ENGLISH) SPEAKING: "They have demonstrated, kind of over and over again, that they just don't really understand what digital consumers really want. When they are able to flex their muscles they can bend the market to their will. But right now the market is stronger than they are so they need to basically buy the expertise that they couldn't develop in house." Take a look at Apple's shares which were down on the day, but streaming music service Pandora moved higher, as did headphone maker Skullcandy. Good news for Merck. Its drug to prevent blood clots was approved by U.S. regulators on Thursday. Shares of Merck, a Dow component, up less than one percent. Netflix is officially bumping up the price for its most popular video streaming plan. New customers will pay $9 a month, that's a dollar more, in Netflix's first rate hike in three years. Shares of Netflix rallied more than 2 percent. But it wasn't alone, many of the so-called momentum names like Twitter, Facebook, Tesla, and LinkedIn rebounded after days of losses. In Europe, all major indexes ended the day lower after a disappointing outlook from Spain's Telefonica.

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Dow hits record close, momentum rebounds

Friday, May 09, 2014 - 02:00