User Growth Slower in Twitter Report
On Thursday, Twitter Inc. (TWTR, +9.06%) reported that new user growth had slowed down more than expected in the December quarter. This prompted investor fears regarding the company’s ability to regain momentum and to justify its market value of $26 billion. Despite this, the shares of the social media company advanced in after-hour trading by 9% with Twitter forecasting a return to prior growth rates. It also reported better-than-expected revenue and earnings for the holiday quarter, despite the slower increase in users. To date, Twitter has 288 million active users monthly and in the last quarter ending in December, the company added an additional 4 million monthly active users, a 1.4 percent growth rate. This was a big decline from the 4.7 percent increase in the previous quarter and also lower than analysts’ expectations for 292 million monthly active users. Since Twitter opened to the public markets, the company has not seen much profit. In the 4th-quarter, Twitter reported a loss of 20 cents a share, or of $125.4 million which is lower than the loss of $1.41 a share or $511.5 million a year ago. Also, Twitter’s earnings per share increased from 2 cents a share to 12 cents a share while revenue increased from $242.7 million to $479.1 million. Since their last earnings report, the shares of Twitter dropped 15 percent.
With rebounding oil prices and upbeat quarterly earnings from Estee Lauder Co. and O’Reilly Automotive Inc., U.S. stocks gained on Thursday and the S&P 500 and Dow indices were pushed into the green for the year. As oil prices advanced 4 percent, materials and energy stocks ended sharply higher while the health-care sector was boosted on news that Pfizer is planning to purchase Hospira Inc. for $16 billion. At the close of U.S. trading, the Nasdaq Composite index (COMP) advanced 1%, or 48 points, to 4,765. Meanwhile, the S&P 500 index (SPX) closed 1%, or 21 points, higher at 2,062.50. All 10 main sectors gained and investors have now turned their attention to Friday’s trading to see if the index can break through its key resistance level of 2,064 reached in January this year. Also on the upside was the Dow Jones Industrial Average (DJIA) which advanced 1.2%, or 212 points, to 17,885, with Pfizer leading the gains.
On Friday, the Australian dollar (AUD) gained. This came after the latest economic review from the Reserve Bank of Australia signaled market pricing as a good view for policy ahead while investors are also focused on the non-farm payrolls in the U.S. to get a better indication as to when the Federal Reserve will increase interest rates this year. Analysts are expecting a small gain from December to 234,000 jobs in January. In currency trading, the AUD/USD traded up 0.27 percent at 0.7819. Meanwhile, the EUR/USD traded down 0.14% at 1.1462, while the USD/JPY traded down 0.10 percent at 117.42. In Japan today, the preliminary indices of leading coincident and lagging indicators are due at 0500 GMT. The CI (coincident composite index), which reflects current business conditions, is expected to post the first rise in two months. Also, the U.S. dollar index was up 0.14% at 93.79.
On Friday, in Asian trading, crude oil futures increased and market analysts expect oil prices to be extremely volatile over the next few weeks. Crude oil future for March delivery traded up $1.18, or 2.3 percent, at $51.65 a barrel on the NYMEX. Meanwhile, Brent crude for delivery in March also rose 2 percent, or $1.15, to $57.72 a barrel on the ICE Futures exchange in London. In the first half of this week, oil prices gained almost 20 percent with investors expecting that the price floor has now been found. However, during the week, data showed that U.S. oil supplies have soared which negatively impacted the oil prices. As a result of a weak U.S. dollar (USD) on Thursday and more unrest in Libya, oil prices are now on an upswing.