Twitter, Groupon, and Microsoft Plummet on Monday

Twitter, Groupon, and Microsoft Plummet on Monday

The Dow Jones Industrial Average was on the rise late Monday morning, up 18 points as of 11:30 a.m. EST. Dow component Microsoft was leading the index lower, slipping about 0.45% in early trading. Groupon and Twitter were having noticeably worse days, down more than 3% and nearly 6%, respectively.

Home sales data shows weak market
National Association of Realtors data released early Monday showed U.S. pending home sales in November rose just 0.2%, less than the 1% that economists had anticipated. The figure is generally considered to be a useful measure of the U.S. housing market; disappointing data on Monday, then, suggests the market isn't as strong as some had expected.

The report may be contributing to the Dow's limited gain on Monday, although investors shouldn't put too much stock into one such release.

Microsoft still waiting for new management
There wasn't much news in particular to account for the Microsoft sell-off; but investors were offloading the tech giant's shares all the same.

Microsoft will go into 2014 still without a long-term CEO in place. Current CEO Steve Ballmer announced his retirement in August, and Microsoft has frustrated some investors' hopes that a new chief would be named by the end of the year. Even with Monday's sell-off, Microsoft shares will end the year up nearly 40%.

Twitter's momentum runs out
Twitter's drop Monday comes after shares of the high-flying social media company lost more than 8% on Friday. Over the last three days, Twitter shares are down nearly 14%.

The recent slide seems to have been fueled by a Friday downgrade from Macquarie analyst Ben Schachter, based purely on valuation. Although Schacter said he continues to like the company's long-term prospects, he believes the company's current valuation is simply unsupported by the underlying business. Evidently, traders agree with him.

Groupon tumbles along with social media
Groupon shares were also down on Monday, though not nearly as bad as Twitter. Like Microsoft, there wasn't much news to account for the sell-off. Groupon shareholders should be accustomed to the volatility -- the stock tends to have wild, daily swings -- but the specific move lower on Monday may have been due, at least partially, to Twitter.

Many investors seem to lump Groupon in with other social media stocks, even though its business is far from social media-related. Along with Twitter, other social media stocks, including Facebook and LinkedIn, also tumbled, suggesting that the sector was suffering from across-the-board selling on Monday.

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Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Twitter. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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