US STOCKS-Wall St down as Nasdaq, small caps weigh; Twitter soars
* Twitter shares soar as much as 92 pct in frenzied NYSE debut
* OTC Markets Group reopens trading in securities after halt
* ECB's interest rate cut a surprise
* Indexes down: Dow 0.8 pct; S&P 1.1 pct; Nasdaq 1.7 pct
NEW YORK, Nov 7 (Reuters) - Frenzied buying in Twitter shares grabbed Wall Street's attention on Thursday, as the social media stock surged well above expectations, while major indexes fell, led by the Nasdaq.
The broader market was hurt by weak earnings from Whole Foods and Qualcomm. The tech-heavy Nasdaq index was on track to post one of its biggest declines of the year.
"Twitter is grabbing all the attention here, but what you should really look at is also how the Nasdaq and the small caps are suffering today while the defensive stocks are holding up. It suggests that there are cracks under the surface," said Ryan Detrick, analyst at Schaeffer's Investment Research in Cincinnati, Ohio.
Twitter Inc soared as much as 92 percent in its first day of trading on the New York Stock Exchange as investors snapped up shares in the popular microblogging site in a frenzy that recalled the days of the dot-com bubble.
The shares opened at $45.10 a share, up from the initial public offering price of $26 set Wednesday, then added to those gains, hitting a high of $50. They were up 83 percent to $47.70 in late trading.
"IPOs are all about the hype and with less than an hour to go in trading, Twitter shares are not selling off, which means it was a successful IPO," Detrick said.
The rest of the market was more downbeat. Qualcomm shares fell 4.7 percent to $66.46, the biggest drag on both the S&P 500 and Nasdaq 100, after the company forecast revenue below expectations.
The Dow Jones industrial average was down 123.20 points, or 0.78 percent, at 15,623.68. The Standard & Poor's 500 Index was down 19.58 points, or 1.11 percent, at 1,750.91. The Nasdaq Composite Index was down 65.57 points, or 1.67 percent, at 3,866.44.
The Nasdaq was led lower by an 11 percent drop in Whole Foods after its results on Wednesday, while Tesla Motors continued its slide, dropping 7.9 percent one day after a big fall on lackluster earnings and on reports of a third car fire. The stock remains a favorite among short-sellers who believe it is overvalued.
Trading in OTC securities was resumed at 3:00 p.m. EST (2000 GMT) after a connectivity issue that triggered a halt in more than 10,000 equities was resolved.
Stock futures had jumped early in the day after the European Central Bank cut interest rates, responding to a slump in inflation that sparked fears the euro zone's economic recovery could stall. The ECB move reinforced expectations global central banks will continue to buoy struggling economies.
Separately, data showed the U.S. economy grew 2.8 percent in the third quarter, but that estimate, which will be revised, was affected by a larger-than-expected build-up of inventories, which tends to subtract from growth later on. Initial jobless claims fell 9,000 to a seasonally adjusted 336,000 last week, roughly in line with expectations.
Those reports, as well as Friday's much-anticipated jobs numbers, will give investors some insight into how long the Fed will keep buying $85 billion a month in bonds. The central bank's stimulus has been a key component of the 24.1 percent year-to-date gain in the S&P 500, putting the index on pace for its best yearly performance since 2003.