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Proprietary Trading Weekly Market Recap For Friday, Feb. 21, 2014

|Includes:Facebook (FB), TSLA

Frozenomics Helps Push Stocks to Multi-year Highs

Stocks were led higher during the past week by the technology sector driven mainly by strong moves from social networking stocks. Facebook($FB) notched up all-time highs despite a historic purchase of WhatsApp. Economic data continued to show weakness, but investors are comfortable with frozenomics, which is a term that describes the weakness due to the unusual weather that hit the US during December and January. For the week, the S&P 500 index closed down slightly breaking two consecutive weeks of positive gains.

U.S. economic data continues to show weakness, during the past week. Housing starts in January tumbled 16.0% to an annual rate of 880,000 units, the lowest level since September, according to the Commerce Department. The percentage drop was the largest since February 2011. Starts for December were revised up to a 1.05 million-unit pace from the previously reported 999,000-unit rate. Economists polled had expected starts to fall to a 950,000-unit rate in January. Building permits, a sign of future construction, fell 5.4% to an annual rate of 937,000 last month from December's upwardly revised rate of 991,000.

In economic news Thursday, CPI climbed 0.1% in January and 1.6% year-over-year, right in line with expectations. Core consumer prices, a measure that strips out food and energy, rose 0.1% from the previous month and 1.6% year over year. Low levels of inflation could be a concern to the Federal Reserve as better employment figures will only come with increasing labor costs.

Initial claims for state unemployment benefits slipped 3,000 to 336,000, according to the Labor Department. The claims data covered the period for February's nonfarm payrolls count. The Philadelphia Federal Reserve Bank said its business activity index tumbled to -6.3 in February, the lowest in a year, from 9.4 last month. Economists had expected the gauge of factory activity in eastern Pennsylvania, southern New Jersey and Delaware to come in at 8.0.

In corporate news, Facebook announced that it is paying 16 billion dollars for the messaging service WhatApp. Although the mobile-messaging application has 450 million monthly active users, the valuation is higher than nearly half of the S&P 500 components. Despite announcing this news on Thursday, the stock still registered an all-time high.

Facebook announced that it is paying 16 billion dollars for the messaging service WhatsApp. Although the mobile-messaging application has 450 million monthly active users, the valuation is higher than nearly half of the S&P 500 components. Facebook opened the trading session nearly unchanged which showed how much faith investors have in the social networking giant. The stock initially moved lower on the news, but quickly turned higher and ended Thursday's trading session up more than 2%.

After the closing bell on Wednesday, Tesla announced earnings that were much better than expected. Tesla Motors' ($TSLA) losses narrowed to $16.3 million in the fourth quarter from $89.9 million a year earlier. Revenue produced by the company increased by 101% to $615.29 million. The figure just barely missed consensus, although earnings per share of $0.33 beat by $0.12.

Stocks: FB, TSLA