LinkedIn IPO gives the markets a bump

NEW YORK - The biggest Internet IPO since Google combined with a drop in oil prices to send the broad stock market higher Thursday.

Shares of social-networking company LinkedIn jumped 109 percent to $94.25 on the first day they were traded on the New York Stock Exchange, under the ticker symbol LNKD. The initial public offering was seen as a preview of trading debuts expected during the next year for other social-networking sites. The candidates include Twitter, game maker Zynga, and the biggest social network of all, Facebook.

"LinkedIn represents the first opportunity for the average investor to participate in what looks like a lasting, powerful trend of social media," said Lawrence Creatura, a portfolio manager at Federated Investors. "They're frothy with excitement, and that's being imputed into the share price."

LinkedIn finished the day with a gigantic price-to-earnings ratio of 554, a valuation reminiscent of Internet stocks during the late-1990s tech bubble. By comparison, the average price-to-earnings ratio of technology companies in the S&P 500 index, such as Apple Inc. and Google Inc., is 15.

Sumeet Jain, a principal with venture investing firm CMEA Capital, said LinkedIn's IPO suggested that mergers and acquisitions would increase this year as social-networking companies grew, a potential boon for the stock market.

LinkedIn is "going to have to be quite aggressive" to meet investors' lofty expectations, Jain said. "All the rest of the companies in the pipeline, when they're all public companies they will be extraordinarily active acquirers as well."

The Dow Jones industrial average rose 45.14, or 0.4 percent, to close at 12,605.32. The S&P 500 gained 2.92, or 0.2 percent, to 1,343.60. The Nasdaq composite index rose 8.31, or 0.3 percent, to 2,823.31.

Oil prices fell back below $100 a barrel after an international agency said there was an "urgent need" for refineries to produce more gasoline and bring down pump prices to prevent a downturn in the global economy. Delta Air Lines Inc. rose 4.1 percent and JetBlue Airways Corp. rose 1.4 percent on expectations that their fuel costs would decrease.

The National Association of Realtors said fewer people had bought previously occupied homes in April. The Conference Board's outlook for economic activity decreased for the first time since June. And the Philadelphia Federal Reserve said its measure of manufacturing activity had slumped to its lowest reading since October.

The mixed news confirmed investors' belief that economic growth could be slow in the coming months.

Stocks opened higher after the Department of Labor reported that applications for unemployment had dropped more than expected. Indexes gave up those early gains after three negative reports on the economy came out at midmorning.

In a sign that the U.S. consumer recovery remains uneven, Big Lots Inc. fell nearly 11 percent after news reports that it decided not to sell itself. The Wall Street Journal said late Wednesday that the company had received bids from two private-equity groups that were lower than it had hoped.

Sears Holding Corp. reported softer sales at its Kmart and Sears stores, causing a first-quarter loss of $1.58 per share, worse than analysts expected. The stock fell 2.6 percent.