Why Pandora Media Inc (NYSE:P), Other Highfliers Jumped? – MagneGas Corporation (MNGA), Ctrip.com International, Ltd. (ADR) (CTRP), NQ Mobile Inc (ADR) (NQ)
U.S. stocks rose on Friday as high-growth stocks rebounded after a three-day selloff. Small-caps and Internet shares have been the biggest victims of the market retreat that began two months ago as investors fled last year’s best-performing equities.
The Dow ended at a record high on Friday, boosted by shares of IBM, while a rebound in high-growth momentum names helped the broader market. The Dow Jones industrial average rose 32.37 points or 0.2 percent, to end unofficially at 16,583.34. The S&P 500 gained 2.85 points or 0.15 percent, to finish unofficially at 1,878.48. The Nasdaq Composite added 20.374 points or 0.50 percent, to 4,071.869.
Adept Technology Inc (NASDAQ:ADEP), MagneGas Corporation (NASDAQ:MNGA), Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), NQ Mobile Inc (ADR) (NYSE:NQ) and Pixelworks, Inc. (NASDAQ:PXLW) all added more than 7% during the last trading session.
Momentum names mostly advanced after a volatile week with the S&P 500 alternating between gains and losses each day last week, and the NASDAQ declined for three straight sessions, its longest losing streak since early April, as Internet-related stocks came under pressure.
“We’ve seen days of investors trying to see if there’s a bottom in these Nasdaq stocks,” said Rick Meckler, president of hedge fund LibertyView Capital Management in Jersey City, New Jersey.
“There’s some fear among investors that their steep fall-offs are a precursor of something to the broader market, and when they rebound, even temporarily, it seems to give confidence to the overall market.”
Once momentum stock Pandora Media Inc (NYSE:P) traded higher as it was seen as potential acquisition target after Apple Inc.’s plan to buy Beats Electronics LLC for $3.2 billion. The move highlights the attractiveness of streaming companies such as Pandora Media Inc. (P) and Spotify Ltd.
For the week, the Dow rose 0.4 percent, while the S&P 500 fell 0.1 percent and the Nasdaq lost 1.3 percent.
“There’s still some volatility ahead, and I’m still not trusting these tech stocks,” Chris Gaffney, senior market strategist at EverBank Financial in St. Louis, said in a phone interview. “Momentum stocks are still going to face some tough times going forward.”
“The market is just trying to find footing,” Jerry Braakman, chief investment officer of First American Trust in Santa Ana, California, said in a phone interview. His firm manages $1.1 billion. “You’ve seen the market changing its mind throughout the day quite a bit recently. That’s indicative of people trying to search for direction.”