Today: A plan to ease the European debt crisis sends markets soaring to heights not seen in years. Plus: Facebook completes its acquisition of Instagram. Also: Amazon takes aim at Apple (AAPL) with new line of Kindle Fire tablets.
Markets roar on plan to relieve European debt
Wall Street gave an enthusiastic thumbs-up to a European plan to resolve its debt crisis Thursday, sending markets soaring to heights not seen in years.
The tech-heavy Nasdaq surged 2.17 percent, or 66.54, to close at 3.135.81, its highest mark since the first dot-com boom 12 years ago. The Dow Jones industrial average gained 244.52 points, up 1.87 percent, to close at 13,292, its best mark since December 2007. And the Standard & Poors 500 index rose 28.68, or 2.04 percent, to close at 1,432.12, its highest level since January 2008.
"There's just a sea of green," JJ Kinahan, a TD Ameritrade strategist, told the Associated Press. "It's pretty fun."
The markets were fueled by a new program unveiled by the European Central Bank on Thursday to buy an unlimited number of government bonds from struggling EU countries, such as Italy, Spain, Ireland and Greece, in
Meanwhile, signs of a U.S. economic recovery got more reassurance from a pair of reports that found unemployment fell and more jobs were added in August. The number of people applying for jobless benefits dropped by 12,000 last week, a Labor Department report said. In a separate report, payroll processor ADP said 201,000 new jobs were added last month, the most since March, the Associated Press reported. That gave rise to hope that Friday's monthly jobs report could be surprisingly strong.
"Today's U.S. reports all beat expectations to put a positive spin on the risks as we approach Friday's U.S. jobs data," economist Michael Englund told Reuters.
Facebook completes Instagram acquisition
Five months after it was first announced, Facebook on Thursday finalized its purchase of Instagram.
The deal was approved by California regulators last week. Originally valued at $1 billion, the acquisition ended up being about $715 million due to Facebook's stock woes, which have cost the world's largest social network more than half its value since its IPO in May. It's still, by far, the largest acquisition in Facebook's history.
"Very excited to announce that we're now officially joining the Facebook family!" Instagram founder Kevin Systrom wrote in a Facebook post Thursday. "I'm psyched for the next chapter of this long journey."
Instagram's offices will move from San Francisco to Facebook's Menlo Park headquarters, and Facebook will take on all 16 of Instagram's employees. In a blog post Thursday, Instagram reassured users that the hugely popular photo-sharing service won't change for the worse. "Instagram isn't going anywhere," it read. "The Instagram app and its features will stay the same one you know and love, and we'll keep working together to build a better Instagram for everyone."
Although Facebook has shut down every previous service it has acquired, it has pledged Instagram will remain running and autonomous. "We are committed to building and growing Instagram independently," Mike Schroepfer, Facebook's vice president of engineering, wrote in a blog post Thursday. "Instagram will continue to serve its community, and we will help Instagram continue to grow by using Facebook's strong engineering team and infrastructure."
Instagram will likely play a key role in Facebook's attempts to grow its mobile market. Instagram has more than 80 million mobile users, The Next Web reports, and more than 5 billion photos have been uploaded to the service.
Facebook continued its minor surge on Wall Street. After dropping to an all-time-low of $17.55 on Tuesday, Facebook shares jumped 4.8 percent Wednesday and gained another 2 percent Thursday, up 38 cents to close at $18.96.
Amazon takes aim at Apple with new Kindle Fires
Amazon fired the latest salvo in the tablet computer wars Thursday, unveiling a line of four new Kindle Fire models.
The Seattle-based Internet giant took aim at Apple's popular iPad by lowering the price on its entry-level, 7-inch Kindle Fire from $199 to $159, and announcing a new 8.9-inch Fire HD model for $299 -- $100 less than an entry-level iPad with a 9.7-inch screen. Apple is rumored to be planning a smaller version of the iPad, a so-called iPad Mini, with a 7.85-inch screen, later this fall. But Apple wasn't the only rival Amazon is targeting: Google's (GOOG) entry-level 7-inch Nexus 7 tablet is priced at $199, and Microsoft will release a 10.6-inch tablet, called the Surface, later this fall. Microsoft has yet to announce a price for that.
"The launch is important as it sets the stage for a fierce market share battle with Apple and Google -- or more likely a battle for second place, given Apple's significant advantages," Colin Sebastian, an analyst at San Francisco's Robert W. Baird & Co. told Bloomberg News.
Amazon's strategy is to keep its devices' prices low -- perhaps even sold at a loss -- while making a longer-term profit from users purchasing apps and content, pretty much the opposite strategy of Apple. "We want to make money when people use our devices, not when they buy our devices," Amazon CEO Jeff Bezos said during Thursday's media event in Santa Monica, Bloomberg reported. To that end, the high-end $499 Fire HD will feature two Wi-Fi channels to enable faster streaming of movies and music.
Amazon also unveiled a new e-reader, the Paperwhite. That will feature a high-contract black-and-white screen and retail for $119.
The Kindle Fire has 22 percent of the U.S. tablet market, according to Amazon, and has been the e-tailer's best-selling item since its introduction nine months ago.
Amazon shares rose $5.16, or 2.10 percent, to close at $251.38.
Silicon Valley tech stocks
Down: LeapFrog, Mattson, OCZ, VeriPhone
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Follow Mike Murphy on Twitter at twitter.com/mmmmurf.