NEW YORK – Shares of Twitter went on sale to the public for the first time Thursday, instantly leaping more than 70 percent above their offering price in a dazzling debut that exceeded even Wall Street’s lofty hopes.
By the closing bell, the social network was valued at $31 billion – nearly as much as Yahoo Inc., and just below Kraft Foods.
Twitter, which has never turned a profit in the seven years since it was founded, worked hard to temper expectations ahead of the IPO, but all that was swiftly forgotten when the market opened.
Trading on the New York Stock Exchange under the symbol “TWTR,” shares opened at $45.10, 73 percent above their initial offering price.
In the first few hours, the stock jumped as high as $50.09. Most of those gains held throughout the day, with Twitter closing at $44.90, despite a broader market decline.
Twitter raised $1.8 billion Wednesday night when it sold 70 million shares to select investors for $26 each.
Credit card use down; auto, student loans rise
WASHINGTON – Americans cut back on using their credit cards in September for the fourth straight month but boosted borrowing in the category that covers auto loans and student debt.
The Federal Reserve says consumers increased their borrowing by $13.7 billion in September to a seasonally adjusted $3.05 trillion. That is a record and follows a gain of $14.2 billion in August.
The increase was driven entirely by an increase in borrowing for auto and student loans, which rose $15.8 billion. Credit card debt fell $2.1 billion following a decline of $885 million in August.
The string of declines in credit card debt will likely hold back consumer spending, which accounts for 70 percent of economic growth.
Mortgage rates inch up from four-month low
WASHINGTON – Average U.S. rates on fixed mortgages rose slightly last week but remained near historically low levels.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan increased to 4.16 percent from 4.10 percent last week, which was the lowest level in four months. The average on the 15-year fixed mortgage rose to 3.27 percent from 3.20 percent.
Rates have been falling since September when the Federal Reserve surprised investors by continuing to buy $85 billion a month in bonds. The purchases are intended to keep long-term interest rates low.
The average fee for a 30-year mortgage rose to 0.8 point from 0.7 point. The fee for a 15-year loan was unchanged at 0.7 point.
Jobless benefits applications fall
WASHINGTON – The number of people seeking U.S. unemployment benefits fell 9,000 to a seasonally adjusted 336,000 last week, bringing applications to pre-recession levels.
The Labor Department said Thursday that the less volatile four-week average dropped 9,250 to 348,250. The average was elevated by the 16-day partial government shutdown and backlogs in California that occurred because of computer upgrades. Weekly applications have fallen for four straight weeks.
The economy added an average 143,000 jobs a month from July through September.
October’s jobs report, to be released today, likely will look even weaker. Economists expect that employers added just 122,000 jobs, and the unemployment rate rose to 7.3 percent, according to FactSet.