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Fed talk drives stocks higher

Wednesday, November 06, 2013 - 01:54

Nov. 06 - Summary: Dow sets another record, but techs fall ahead of Twitter debut; Top race at Microsoft narrowed to five candidates -sources; Ralph Lauren lifts low end of guidance; Tesla hits the skids one-day after of earnings report. Fred Katayama reports.

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Strong economic data from the U.S. and Europe and talk that the Fed may keep rates lower longer than expected powered stocks higher. But investors shunned big name tech stocks ahead of Twitter's Thursday debut. The Dow and S&P gained, with the industrials hitting a record high. But the Nasdaq finished slightly lower. The Leading Economic Index rose more than expected in September, suggesting that the economy is possibly gaining momentum. Also spurring demand for stocks: The president of the San Francisco Fed said the Fed should wait for more signs of growth before scaling back its bond buying program, and two Fed economists argued that rates should be held lower for longer to drive down unemployment. Twitter makes its debut as a public company Thursday. It's the most highly anticipated IPO since Facebook. Investor demand was so strong that Twitter upped its price range earlier this week. But beware: Birinyi Associates says internet IPOs on average fall 8.6 percent from opening day over the next six months, trading lower 62 percent of the time. Investors were hungry for newbies. Cyber security company Barracuda shot up as much as 31 percent on its first day Pulling up the S&P: Microsoft. Nomura raised its price target on the stock, and Reuters reported that the software giant had narrowed its list of CEO successors to five. Ralph Lauren gained after the designer clothing company hiked its dividend and the low end of its full-year sales outlook. It has been opening more of its own stores where sales are strong and relying less on its wholesale business. Dragging down the Nasdaq: Tesla. Its shares got slammed after the electric automaker delivered fewer Model S cars and less profit than expected. In Europe, stocks mostly rose on strong earnings and hopes for an interest rate cut.