US stocks closed flat after a rally of three days as Alibaba Group Holding Ltd. shares began trading and investor optimism was boosted by corporate takeovers.
According to Business Week, Alibaba gained 38% in its trading debut after raising a $21.8 billion record-breaking IPO. Dresser-Rand Group Inc. gained 9.4% amid Siemens AG preparation to offer above $6.5 billion to acquire the company. Oracle Corp. dropped 4.2% after its chief executive officer, Larry Ellison, stepped down.
In New York, the Standard & Poor’s 500 Index dropped 0.96 points to 2,010. The gauge increased 1.35 this week, the biggest in a month. The Russell 2000 Index of small companies fell 1.1% while the Dow Jones Industrial Average gained 13.75 points to 17,279.74.
TD Ameritrade Holding Corp chief strategist, Joe “JJ” Kinahan said, “It’s quadruple witching hour. Although the headlines are all about BABA, the below-the-surface trading will be centered around expiration for on a lot of products. You may see some added volatility.”
Reuters quoted Federated Investors chief equity market strategist, Phil Orlando said, “Alibaba was awesome. The Alibaba deal was done correctly, which is, you leave something on the table for investors to enjoy. So the market got to focus on Alibaba, which was positive.”
Oracle lost 4.2% to $39.80, the S&P 500 biggest drag while the S&P technology index performed the worst among the ten major sectors of the S&P.
The volume was heavy with around 8.68 billion shares traded, which was significantly above this month’s average of 5.71 billion. Increase in volume is attributed to Alibaba and the future’s expiration and options for stocks and indexes.
On the NYSE, the most active stocks were Coca-Cola Co, up 0.62% to $42.05, Alibaba and Bank of America, down 0.53% to $16.95.
Yahoo, Microsoft was up 1.8% to $47.52 and Sirius XM dropped 1.8% to $3.57 traded actively on the Nasdaq.