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S&P Climbs toward Record; Twitter Hammered After Earnings

David Becker
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S&P Climbs toward Record; Twitter Hammered After Earnings

The S&P 500 index continued to climb toward an all-time high and is gaining traction against the Nasdaq and the Russell as investor move into large cap stocks. Generally, the tail end of a rally is signified as investors alter their assets and move money into large cap stocks as opposed to perceived riskier small cap and technology stocks. Prior to the opening bell in the US stocks are mostly flat as Twitter (NYSE:TWTR) delivered earnings that beat but did not deliver what the market was looking for.

Twitter tumbled after reporting earnings ahead of expectations, but providing a disappointing outlook. The company’s second quarter revenue forecast was $270M-$280M against consensus of $272.9M. In Q1, monthly active users rose 6% sequentially and 25% year over year to 255M, roughly inline with expectations. Timeline views rose 6% sequentially, and just 15% year over year to 157 billion. Ad sales rose 125% year over year to $226 million amid a barrage of new ad products. Shares are down slightly more than 11% in the premarket.

eBay (NASDAQ:EBAY) slumped after beating Q1 profit estimates, but providing a soft Q2 outlook. Expected Q2 revenue for eBay of $4.325-$4.425 billion was below consensus $4.40 billion, and EPS guidance of $0.67-$0.69 was shy of hopes for $0.70. In Q1, PayPal revenue rose 19% year over year to $1.85 billion, with payments volume up 27% to $52 billion.

Next up in the US is today’s GDP, which is expected to show an increase of 1% compared to a 2.6% increase in the Q4. The FOMC is also on the docket but not expected change monetary policy other than reducing their bond purchase program by 10 billion dollars. Additionally, ISM will release data on the manufacturing in the Chicago area, while the Fed will release the employment cost index.

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