Groupon stock has fallen below its initial public offering price for the first time as investors reassess the challenges facing the still-unprofitable online deals company in a shaky economy. The shares plunged $2.79, or 14 percent, to $17.28 in early afternoon trading Wednesday. That’s below Groupon’s IPO price of $20 set less than three weeks ago. The rapid fall from Wall Street’s graces occurred almost entirely this week. Congress’ inability to reach an agreement on how to reduce the U.S. deficit has raised the specter of automatic cuts and tax increases, which would increase the risk of the economy falling into another recession. That reduces Wall Street’s appetite for risky investments such as Groupon, which is facing increasing competition in the rapidly growing niche of online advertising that it pioneered.
Durable goods orders fall again in October
Business orders for long-lasting manufactured goods fell for a second straight month in October. While much of the weakness came from a big drop in demand for commercial aircraft, a key category that tracks business investment spending fell by the largest amount since January. The Commerce Department reported Wednesday that orders for durable goods fell 0.7 percent following a September decline of 1.5 percent. Orders for core capital goods, considered a good proxy for business investment spending, dropped 1.8 percent, the biggest decline since a 4.8 percent fall in January. Manufacturing has been one of the strongest sectors in the economy in this sub-par recovery, but this sector slowed this year.
BMW raising prices to cover inflation
German automaker BMW says it’s raising prices on most of its models in North America to cover the cost of inflation. The company says it balanced inflation against competitive pressures and the auto sales market before deciding on increases of less than 1 percent. The raises take effect Jan. 1. BMW also raised its shipping fee 2 percent to $895. Price increases range from $170 to $320 per vehicle. The price of BMW’s lowest-cost car, the 128i Coupe, will rise one-half percent to $32,095, including shipping. The most-expensive BMW, the X6-M sport utility vehicle, rises 0.4 percent to $91,195.
Rising farm sales boost Deere profit
Deere &Co. says strong sales of its farm equipment helped boost its fourth-quarter profit by 46 percent and says it expects robust demand will lead to better results next year. The earnings and revenue each beat Wall Street expectations, and Deere shares climbed more than 3 percent in midday trading. The Moline, Ill., company said Wednesday that equipment sales were up 20 percent in the quarter. The sales growth helped Deere generate net income of $670 million, or $1.62 per share, for the three months ended Oct. 31, up from $457 million, or $1.07 per share, a year ago.
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