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									Facebook v. the Market: Who’s Fueling Who?

Stock markets are surging today and the Nasdaq has hit its highest point
since 2001. Of course, a lot of that is thanks to the stellar jobs report

But Facebook’s IPO filing also appears to be fueling some of the
excitement, acting as something of an indicator that the market, for tech
stocks at least, has room to run.

Nasdaq, typically thought of as a tech-heavy index, has risen 3.5% since
last Thursday’s close, the day before news first broke Facebook would be
filing this week. Yesterday, the first session since Facebook filed its
documents, the Nasdaq jumped, besting the S&P 500's gains and the Dow’s

Typically when a company is plotting to launch itself onto the public
markets, it sizes up when to sell based on market conditions. Few
companies want to go public when the markets are stuck in a bad mood.

But Facebook’s filing and upcoming offering instead appears to be driving
the market.

Malcolm Polley, president and chief investment officer at Stewart Capital
Advisors LLC in Indiana, Penn., says judging by his phone ringing, people
are very excited for Facebook.

“People are thinking if someone like Facebook is going to come public
now, maybe things aren’t as bad as they think they are,” Polley says.
“People hear the hot thing and it gets them to thinking about stocks, and
maybe if they can’t buy Facebook, they can buy something else.”

Brett Gordon, a professor at Columbia School of Business who focuses on
technology companies, said investors appear to be betting that Facebook
thinks the market will rise more.

“Investors would be interested in getting in on other social media firms
before the market would eventually peak at some point,” Gordon says.

Internet stocks in particular are benefiting. Zynga is now up 36% this
week alone after jumping 17% yesterday and another 10% today. Groupon,
meanwhile, is up 7.4% this week. Facebook’s filing said Zynga makes up
12% of Facebook revenues.

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