The U.S. Stock Exchange, Essay Example

On 31^st August 2012, LG Display’s stock price increased by 2% in a single day which may be due to the fact that the company is expected to benefit from Apple’s launch of mini iPad which is rumored to use LG Display screens (Culpan). Higher future expectations lead to higher demand for stock. Limited Brands stock price also jumped up by about 1 percent on 31^st August, 2012 which may be due to the fact that the company reported higher than expected sales in August (Feran) which has impressed investors. Stock price are influenced by investors’ expectations and positive expectations result in higher demand for the stock.

As far as LinkedIn Corporation is concerned, its stock price has risen by a little more than 3% over the period 28^th August, 2012 to 4^th September, 2012. It is possible that the company has been benefitting from high unemployment rate (Delaney) since it is a social networking destination for both working and unemployed professionals. Logitech International has also enjoyed a little over 3% stock price appreciation over the same period which may be due to positive response to its new product, Logitech Squeezebox Touch (Pinault). It may be that investors expect the company’s sales to grow and believe it has been introducing products that will appeal to the consumers.

Both NYSE and NASDAQ match investors and sellers of stock. Trading in stocks listed on NYSE take place in a physical setting while NASDAQ doesn’t have any physical location but instead is a telecommunications network. At NYSE, buyers and sellers directly interact with each other while on NASDAQ, their interaction takes place through a dealer. NASDAQ and NYSE together account for the bulk of the stock trading in the U.S (Investopedia).

A company may choose one location over the other for cost reason. The listing fees on NASDAQ tends to be lower than on NYSE. Another reason may be listing requirements because NASDAQ has lower listing requirements as compared to NYSE which tends to favor more stable companies. The type of industry in which a company operates may also influence listing decision because most companies in certain industries tend to favor one location over the other. For e.g. technology companies usually prefer NASDAQ (Investopedia).

References

Culpan, Tim. Apple Said To Use AU Optronics, LG Display Screens In Mini IPad. 31 August 2012. 4 September 2012 <http://www.bloomberg.com/news/2012-08-31/apple-said-to-use-au-optronics-lg-display-screens-in-mini-ipad.html>.

Delaney, Arthur. LinkedIn, Unemployment And The Online Job Search. 1 September 2012. 4 September 2012 <http://www.huffingtonpost.com/2012/09/01/linkedin-unemployment_n_1847853.html>.

Feran, Tim. Limited Brands’ sales for August top expectations. 30 August 2012. 4 September 2012 <http://www.dispatch.com/content/stories/business/2012/08/30/limited-sales-for-august-improve.html>.

Investopedia. The NYSE And Nasdaq: How They Work. 18 December 2009. 4 September 2012 <http://www.investopedia.com/articles/basics/03/103103.asp#axzz25b1ZDvIr>.

Pinault, Sarah. Logitech Squeezebox Touch Review. 29 August 2012. 4 September 2012 <http://www.wired.com/geekmom/2012/08/logitech-touch-review/>.