According to a report from the Wall Street Journal, "there are two constants this holiday season: The U.S. stock market keeps hitting new highs and social-media stocks can do little wrong".
The Dow Jones Industrial Average has risen every day since the Federal Reserve’s decision last week to rein in, or taper, some of its extraordinary easy-money policies. The blue-chip average is up 482 points, or 3%, during its five-day winning streak.
Markets were closed Wednesday for Christmas.
Microblogging site Twitter,” has surged 17% this week and is up 70% for the month. Shares, which traded above $70 this week for the first time, are up more than 170% from last month’s $26 IPO price.
The rally has confounded many Twitter analysts, who generally remain lukewarm on the shares. “It appears valuation metrics are irrelevant,” Blake Harper, an analyst at Wunderlich Securities, wrote to clients on Tuesday. “Investors are betting aggressively on Twitter being the next great media-technology platform.”
He says positive investor sentiment and a limited float of available shares could push the stock price even higher in the near term. But broadly speaking, “the stock trades at objective measures that are hard to justify,” Mr. Harper said.
Facebook is another stock that continues to befuddle Wall Street. Shares hit a new highon Tuesday, finishing at $57.96. The stock has rallied 5.2% since joining the S&P 500 late Friday after the closing bell. Facebook is up 23% this month and 117% for the year.
Social-media stocks aside, the stock market’s latest leg higher has occurred on relatively low volume. With Wall Street trading desks half empty for the holidays, most market observers aren’t putting too much emphasis into what transpires through the end of the year.
