USA: Wall Street opens lower after four weeks of market gains / Meanwhile Yahoo agrees to buy social networking site Tumblr for 1.1 billion U.S. dollars

Record ID: 187258

  • Title: USA: Wall Street opens lower after four weeks of market gains / Meanwhile Yahoo agrees to buy social networking site Tumblr for 1.1 billion U.S. dollars
  • Date: 20th May 2013
  • Summary: NEW YORK CITY, NEW YORK, UNITED STATES (MAY 20, 2013) (REUTERS) VARIOUS OF YAHOO CEO MARISSA MAYER'S TUMBLR PAGE ANNOUNCING DEAL FOR TUMBLR VARIOUS OF YAHOO WEBSITE YAHOO PRESS CENTER WEBSITE ANNOUNCING DEAL FOR TUMBLR
  • Embargoed: 4th June 2013 13:00
  • Keywords:
  • Location: Usa
  • Country: USA
  • Topics: Business,Economy
  • Reuters ID: LVAE3HJMMOQXZBSSYX73V9L6HGRC
  • Story Text: U.S. stocks dipped in early trading on Monday (May 20), with investors scrambling for catalysts after major U.S. equity indexes closed a fourth consecutive week of gains Friday.
    Deals including Yahoo's $1.1 billion (USD) bid for Tumblr indicate that companies continue to search for growth through acquisitions despite record highs, a bullish sign for stocks.
    The S&P 500 and Dow industrials finished Friday at fresh record highs and the Nasdaq Composite is at its highest since late 2000. A light economic and earnings calendar could leave the market vulnerable for a pullback, but those have been shallow and short-lived as investors take any weakness as a new chance to increase long positions.
    The Dow Jones industrial average fell 34.62 points or 0.23 percent, to 15,319.78, the S&P 500 lost 2.41 points or 0.14 percent, to 1,665.06 and the Nasdaq Composite dropped 1.62 points or 0.05 percent, to 3,497.35.
    Federal Reserve chairman Ben Bernanke's testimony before Congress on Wednesday is seen by many as the highlight of the week for markets. The beginning of the end of the Fed's massive bond-buying program, which has given strong support to stock gains, might come sooner than many investors think if recent gains in the U.S. labor market hold.
    Yahoo shares dipped 0.3 percent to $26.44 after its board approved a deal to buy blogging and social networking site Tumblr for $1.1 billion in cash.
    The deal, announced on Monday, is a bold bet by Yahoo Chief Executive Marissa Mayer to revitalize the company by co-opting a Web property with strong visitor traffic but little revenue.
    The acquisition, which will use up about a fifth of Yahoo's $5.4 billion in cash and marketable securities, is the largest by far since Mayer took the reins in July with the goal of reversing a long decline in Yahoo's business and Web traffic.
    On Mayer's Tumblr page she said "We promise not to screw it up."
    Analysts said Yahoo appeared to be overpaying for a business that might not contribute to revenue for years, but that it had to do something to plug a hole in its social media efforts.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2013. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register