Tech Slump Drags Down Market
Business Roundup for Wednesday, March 26.
NEW YORK (AP) — A slide in technology companies dragged the stock market lower, erasing an early gain. Facebook slumped 7 percent after announcing a $2 billion acquisition of virtual reality company Oculus, its second big purchase in two months. The initial public offering of the company behind the hit game "Candy Crush Saga" flopped. King Digital Entertainment dropped 16 percent on its first day of trading. The Standard & Poor's 500 index fell 13 points, or 0.7 percent, to close at 1,852 Wednesday. It had been up 10 points earlier. The Dow Jones industrial average fell 98 points, or 0.6 percent, to 16,268. The technology-heavy Nasdaq composite fell 60 points, or 1.4 percent, to close at 4,173. Bond prices rose. The yield on the 10-year Treasury note fell to 2.70 percent
NEW YORK (AP) - Wall Street is giving King Digital, the company behind the popular mobile game "Candy Crush Saga," the cold shoulder in its public trading debut. King's stock priced at $22.50 on Tuesday, valuing the company at $7.1 billion. But it opened on Wednesday at $20.50, down almost 9 percent and lost more ground by midmorning. King Digital Entertainment PLC, based in Ireland, had $1.88 billion in revenue last year. That's more than 10 times its 2012 revenue of $164.4 million. Its other top games include "Pet Rescue Saga" and "Farm Heroes Saga." Some analysts have questioned whether King would be able to repeat the success of "Candy Crush," which has been far more successful than any of its other games. This has drawn comparisons to another game maker, Zynga Inc. Zynga had a much-ballyhooed IPO in late 2011, but the company faltered after having trouble transitioning into a mobile company from one whose games are played mostly on a desktop computer. But Ricardo Zacconi, King's co-founder and CEO, told CNBC Wednesday morning that the company is "not just a one-hit wonder" and pointed out that it has three games in the top 10 on Facebook. King is trading on the New York Stock Exchange under the ticker symbol "KING." By midmorning, the stock was down $2.50, or 11 percent, at $20 per share.
WASHINGTON (AP) — Orders to U.S. factories for long-lasting manufactured goods have risen by the largest amount in three months. The Commerce Department says orders for durable goods increased 2.2 percent last month following a 1.3 percent drop in January. The rebound was led by a 13.6 percent surge in orders for commercial aircraft. But a category that serves as a proxy for business investment plans fell 1.3 percent in February, the biggest drop since a 1.6 percent December decline.
SANTA CLARA, Calif. (AP) — Intel has bought Basis, the startup behind the popular fitness tracker by the same name, for an undisclosed sum. Basis uses a wearable gadget to track users' activity level, heart rate, sleep patterns and other data. Intel also says the CEO of Basis Science Inc. will become general manager at the chipmaker's new devices group.
BRUSSELS (AP) — President Barack Obama says the European Union and the United States should push ahead with negotiations to create what would be the world's largest free-trade zone. Obama says concluding the free trade deal would also facilitate exports of natural gas from the U.S. to the 28-nation EU. The EU relies heavily on Russia for gas supplies. Obama spoke during a visit to the EU headquarters in Brussels.
NEW YORK (AP) — New York City's Wall Street bull has been freed from his corral. The New York Post reports that police removed the barricades surrounding the Charging Bull sculpture on Tuesday. The bull had been penned in since September 2011, when police feared the sculpture would be targeted by Occupy Wall Street protesters. The New York Police Department says security around the bull will be assessed on a day-to-day basis.
SEOUL, South Korea (AP) — Worlds stock markets are higher today with investors expecting new stimulus measures from Europe and China and U.S. economic data reinforcing recovery hopes for the world's largest economy. In energy markets, benchmark U.S. oil for May delivery was up just 3 cents at $99.22 per barrel in electronic trading on the New York Mercantile Exchange.
NEW YORK (AP) — Facebook has agreed to buy Oculus for $2 billion, betting that its virtual reality technology may be a new way for people to communicate, learn or be entertained. Facebook chief executive Mark Zuckerberg calls it "a long-term bet on the future of computing." The Oculus Rift virtual reality headset has received a lot of attention from video game developers, though it has yet to be released for consumers. The headsets cover a user's eyes and create an immersive world that reacts to turning one's head or moving back and forth.
WASHINGTON (AP) — A push by congressional Democrats to bring a wide array of changes to the International Monetary Fund has fallen victim to a greater desire by lawmakers to punish Russia for its bold military incursion into Crimea. Democrats wanted legislation aimed at helping Ukraine to include provisions to enhance the IMF's lending capacity. But Republicans were opposed. The Senate is on track to approve the sanctions Thursday along with aid for Ukraine.
NEW YORK (AP) — A federal appeals court has upheld the insider trading conviction of a former Goldman Sachs and Procter & Gamble board member. The 2nd U.S. Circuit Court of Appeals ruled yesterday that Rajat Gupta was fairly tried and convicted of conspiracy and securities fraud. Gupta was sentenced to two years in prison and fined $5 million. But he's been free on $10 million bail.
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