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Facebook drives Nasdaq higher

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Facebook drives Nasdaq higher

Stocks in the US were mixed at the open as investors eyed the enormous rally in FaceBook (NASDAQ:FB) shares.  The social media giant released better than expected earnings after the bell on Wednesday, buoying the Nasdaq 100 as the stock rallied more than 20%.  Economic data in the US continued its string of weakness with the Labor Department releasing initial jobless claims.

Initial jobless claims increased by 7,000 to 343,000, according to the Labor Department.  Economists had expected first-time applications to rise to 340,000 last week. Claims for the prior week were revised to show 2,000 more applications received than previously reported. The four-week average of new claims fell 1,250 from a week earlier.

Yields in the 10-year space continued to move higher on Thursday eroding investor confidence in stocks.  Despite the recent weakness in US economic data, 10-year yields backed up 15 basis points over the past 5-trading sessions, eroding investors’ confidence.

On a positive note, automobile manufacturer GM (NYSE:GM) posted better than expected earnings. The company stated that net profits increased to $1.41 billion or 93 cents a share, which reflect preferred dividends, compared with $1.85 billion a year earlier. Excluding some costs, GM earned 84 cents a share, exceeding the 76 cents analysts were expecting. Revenue rose 4% to $39.1 billion from $37.6 billion a year earlier.

The Nasdaq 100 was the biggest gainer on Thursday moving higher on the heels of Facebook’s outstanding performance.  The social media stock surged nearly 30% on Thursday.

Momentum on the Nasdaq 100 is waning with the MACD poised to generate a sell signal.  The index is hovering near the zero level and a dip below would be a warning to sell stocks.  The RSI is printing near 61 which is on the high end of the neutral range.

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