Tag Archives: nasdaq

The Danger of an Arrogant Valley

I arrived in Silicon Valley in 1997, in time to witness the dot-com boom. By the end of 1999, the Nasdaq was up around 400% from the time of the Netscape IPO just 4½ years earlier. Palo Alto restaurants were crowded with people talking about their startups and flaunting their paper wealth. While waiting for a table at Buca di Beppo in Palo Alto, I saw a man hit on a woman by pointing to his friend and saying, “Do you know who this guy is?” It turns out he wasn’t anyone notable, but he did have pre-IPO shares in a dot-com! That alone, in 1998-1999, was considered success. There was a sense of entitlement and arrogance—that, simply by showing up, you had won.

By 2000, the inevitability of wealth came into question and stocks plummeted. The Nasdaq had its largest single day drop in April 2000, falling almost 10%. It then fell a devastating 75% over the next several years. Fucked Company, a site dedicated to chronicling the demise, had daily reports about layoffs and bankruptcies. Friends who had millions of dollars on paper lost everything, sometimes bankrupted by tax laws that wanted to tax them on gains that had evaporated. People with impressive sounding VP and CEO titles were out of work and moving back into their parents home. The good times ended as quickly as they started.

The people who stuck around Silicon Valley after the crash loved technology, loved building businesses, and didn’t care so much about getting rich. Many of the people who were looking to get rich left for finance jobs in New York (yes, they left one bubble and walked right into another).

The era of opulent parties and people bragging about their paper wealth was over. In its place was an era of thrift. It was a return to the garage culture that existed when Silicon Valley first began. People were bootstrapping their companies. Flickr famously avoided outside financing and sold to Yahoo for what at the time seemed like a terrific exit (in retrospect it was a humble amount, about 5% of what Instagram was able to get from Facebook in 2012).

That sense of thrift has receded in recent years, replaced by a mood of unlimited money and easy wins. There is a dangerous sense that arrogance is replacing prudence. Startup salaries have increased 50% from the humble days of 2003. Startup CEOs are asking for $200,000 a year to run a company that has only a few million in the bank and no revenue. Parties are being thrown to celebrate funding announcements rather than product milestones.

Would you spend money this way if you knew raising your next round would be difficult? It’s easy to raise money until it isn’t. Paul Graham put it best: “Apparently the most likely animals to be left alive after a nuclear war are cockroaches, because they’re so hard to kill. That’s what you want to be as a startup.”

Written by

Wall Street closes 2013 at records; best year in 16 for S&P, 18 for Dow

   Text Size  

Published: Tuesday, 31 Dec 2013 | 4:24 PM ET

By: | Markets Writer

Play Video
Bob Pisani‘s bold 2014 predictions
CNBC’s Bob Pisani predicts the Fed will increase its bond buying program in 2014.

U.S. stocks on Tuesday closed 2013 at records, with the S&P 500 posting its largest annual jump in 16 years and the Dow its biggest gain in 18, after positive reports on consumer confidence and housing boosted sentiment on the final trading day of the year.

“It’s been a great year, if you look at it from what the prevailing sentiment was at the beginning of the year, it has surpassed even the most bullish of predictions. It’s the type of year you want to savor, there’s been a nice wealth effect that has warmed people’s portfolios,” said Matthew Kaufler, portfolio manager at Federated Investors.

“Between the rise in the markets as well as the rebound in housing prices, this year went a long way in repairing consumer balance sheets,” he added.

(Read more: Cashin: 2 things that may surprise markets in 2014)

Hertz Global Holdings rose a day after the car-rental company said it had adopted a one-year shareholder rights plan after “unusual and substantial activity” in its shares. Phillips 66 gained after saying Berkshire Hathaway would exchange about $1.4 billion in shares to acquire a unit that produces chemicals to improve pipeline flow. Marvell Technology Group surged after private-equity firm KKR & Co. said in a regulatory filing that it held a 6.8 percent stake in the chip manufacturer.

Name Price Change %Change
DJIA Dow Jones Industrial Average 16576.66
72.37 0.44%
S&P 500 S&P 500 Index 1848.36
7.29 0.40%
NASDAQ Nasdaq Composite Index 4176.59
22.39 0.54%

Up 26.5 percent for the year, the Dow Jones Industrial Average finished the year at another closing high, its 52nd for 2013. It rose 72.37 points, or 0.4 percent, to 16,576.66.

American Express led blue-chip gains, which extended to 23 of its 30 components.

Tallying its fourth monthly advance, and up 29.6 percent for the year, the S&P 500 also advanced to an all-time finish, with energy the best performing and telecommunications the hardest hit among its 10 major sectors. It gained 7.29 points, or 0.4 percent, to 1,848.36.

(Read more: Housing could be facing another bubble: Shiller)

For the year, consumer discretionary gained the most, followed by health care, with telecommunications and utilities performing most poorly.

The Nasdaq rose 22.39 points, or 0.5 percent, to 4,176.59, a yearly advance of 38.2 percent, and its best year since 2009.

For every stock falling, nearly two gained on the New York Stock Exchange, where 568 million shares traded. Composite volume surpassed 2.3 billion.

Play Video
Pisani: Look for volatility to spike
CNBC’s Bob Pisani looks at the great year for the major indices and explains why volatility has been low.

The 10-year Treasury note yield used in determining mortgage rates and other consumer loans rose 6 basis points to 3.036 percent, its highest of the year and since July 2011. The dollar edged higher against the currencies of major U.S. trading partners.

(Read more: Over 2 million have signed up on Obamacare)

On the New York Mercantile Exchange, oil futures fell 87 cents, or 0.9 percent, to $98.42 a barrel, while gold futures settled 28 percent lower for 2013 at $1,202.30 an ounce, its largest annual fall in 32 years.

Stocks furthered their advance after the Conference Board’s index of consumer confidence climbed to 78.1 in December from 72 in November. Analysts expected a December reading of 76.

Ahead of Wall Street‘s open, stock futures retained modest gains after a report had home prices in 20 U.S. cities climbing in October from the year earlier, illustrating the bounce back in real estate will continue in the new year. The S&P/Case-Shiller home price index rose 13.6 percent in October from the year earlier period.

Stocks offered little to no reaction to the Institute of Supply Management’s Chicago purchasing manager’s index, which fell to 59.1 in December from 63.

On Monday, stocks finished little changed.

“Going forward, I would say I am optimistic on equities but valuations are essentially fair, so I don’t know that we are going to tack on another 20 to 30 percent in 2014, my expectation would be 8 to 10 percent. Just because the economy is picking up and tapering has begun doesn’t mean the markets are going to perform accordingly,” said Kaufler.

Coming Up This Week:

Wednesday – Markets closed for the New Year’s Day holiday.

Thursday – Initial jobless claims for week ending Dec. 28 at 8:30 a.m. Eastern. Manufacturing PMI for December at 8:58 a.m. Eastern. ISM Manufacturing for December at 10 a.m. Eastern. Construction spending for November at 10 a.m. Eastern.

Friday – Light vehicle sales for December. Earnings from Lindsay Corp. expected ahead of the market open.

—By CNBC’s Kate Gibson

Correction: This article has been revised to reflect the Dow’s annual rise is the best in 18 years.



Stocks, Treasury yield climb on Christmas Eve


William Cummings, USA TODAY 1:51 p.m. EST December 24, 2013

Stocks finished higher on a shortened day of Christmas Eve trading as the 10-year Treasury yield neared 3%.

The Dow Jones industrial average and S&P 500 again set records for all-time closing highs, reaching 16,357.55 and 1,833.32, respectively.

At the 1 p.m. ET closing bell, the Dow and S&P 500 index logged gains of 0.4% and 0.3%, respectively. The Nasdaq composite finished 0.1% higher.

DURABLE GOODS: Orders jump 3.5%

NEW HOME SALES: Dip in November

Government reports showed durable goods orders surging as home sales gave up some ground.

The Commerce Department said orders for durables jumped 3.5% in compared with October, when orders had fallen 0.7%. The increase was led by a 21.8% jump in demand for commercial aircraft, which can be volatile.

Homebuilder stocks rose after the government reported that new home sales rose at a faster pace than analysts were expecting last month.

But still, sales slipped slightly after a big surge the previous month. The figures add to evidence that the housing market is struggling to sustain the pace of its recovery.

The yield on the 10-year Treasury sprang 1.8%, climbing to 2.98%. It’s been almost two and a half years since the yield surpassed 3%.

On Monday, the Dow Jones industrial average rose 73.47 points, or 0.5%, to a record close of 16,294.61. The Standard & Poor’s 500 index gained 9.67 points, or 0.5%, to close at at a record 1,827.99. The Nasdaq composite jumped 44.16 points, or 1.1%, to 4,148.90.

MONDAY: Stocks: Record-high indexes cruise higher

Historically, stocks perform well during the holiday season, albeit with light trading, and this year has followed that trend, with the market setting new records thanks to several strong reports indicating a strengthening recovery. The Fed’s announcement that it will begin to slowly taper its economic stimulus has also removed a degree of uncertainty from the market.

MORE: Is ‘Santa Claus’ rally in cards for Wall Street?

In Asia, stock indexes finished higher, despite losing early gains in late trading. Japan’s Nikkei 225 index gained 18.91 points, or 0.1%, to close at 15,996.88, after touching above the 16,000 level for the first time in six years in the morning session. China’s Shanghai Composite added 3.20 points, or 0.2%, to finish at 2,104.66. Hong Kong’s Hang Seng index gained 257.99 points, or 1.1%, to 23,179.55.

Major European benchmarks also ended higher, with Britain’s FTSE 100 index up 0.2% and France’s CAC-40 up 0.1%.

Contributing: The Associated Press



Apple Inc. (AAPL) Fires Back In E-book Case !!!

The following content is from Value Walk!

Within a fraction of a day that saw the U.S. Department of Justice, along with over 30 states, propose a set of solutions for Apple Inc. (NASDAQ:AAPL) following its July loss in the e-books price-fixing case, Apple Inc. (NASDAQ:AAPL) has returned its own proposal maintaining that the company did nothing wrong and said that the government’s proposal was confused, unwarranted, vague and bellicose.


REPORT: Zynga.com Becomes More Independent of Facebook INC


Wall Street Journal – Zynga on Thursday announced changes to its gaming portal that will make the company even more independent of Facebook INC. Among the updates, Zynga will now use its own currency on Zynga.com, instead of routing payments through Facebook, which collects a thirty percent fee from transactions. Previously, a Facebook (NASDAQ: FB) account was required to sign up for Zynga.com