By Barbara Kollmeyer, MarketWatch , Ryan Vlastelica
Twitter has biggest one-day drop since October as user growth
disappoints
U.S. stocks rose on Thursday, with major indexes extending their
string of records this year as the latest corporate results
supported lofty market valuations.
In particular, Facebook Inc.(FB) rallied 4.9% a day after the
social media giant posted results that beat quarterly earnings
expectations
(http://blogs.marketwatch.com/thetell/2017/07/26/facebook-earnings-put-instagram-in-focus-amid-shift-in-newsfeed-ads-live-blog/).
The company could be nearing a $500 billion market cap
(http://www.marketwatch.com/story/facebook-heads-toward-500-billion-market-cap-after-earnings-2017-07-26)
if shares maintain their strength throughout the session. The stock
has already jumped more than 40% thus far this year.
The Dow Jones Industrial Average jumped 0.3% to 21,775, a rise
of 0.3%. The S&P 500 added 3 points to 2,481, a rise of 0.1%.
The Nasdaq Composite Index added 31 points to 6,453, a rise of
0.5%. All three hit intraday records in early trading.
The outsize move in the Nasdaq was largely attributable to
Facebook, as the index is heavily weighted toward technology
shares.
Facebook is one of the so-called FAANG stocks, a reference to
the quintet of technology and internet names (Facebook, Apple
(AAPL), Amazon (AMZN), Netflix (NFLX), and Google parent Alphabet
(GOOGL)) that have driven market returns thus far this year.
However, those sharp gains have also raised questions over
valuation.
"Tech stocks are having to live up to lofty expectations, given
the gains they've experienced this year--particularly in the bigger
names--and the levels of growth we're seeing are doing just that,"
said Craig Erlam, senior market analyst at Oanda, in emailed
comments.
Read:Next stop for Facebook shares? $200, say analysts
applauding results
(http://www.marketwatch.com/story/next-stop-for-facebook-shares-200-say-analysts-applauding-results-2017-07-27)
Read:Facebook keeps warning about growth, but growth doesn't
stop
(http://www.marketwatch.com/story/facebook-keeps-warning-about-growth-but-growth-doesnt-stop-2017-07-26)
Erlam believes investors are looking for something to fill the
gap left by U.S. President Donald Trump's inability to deliver on
tax-cut and spending promises.
"As it stands, earnings season isn't disappointing, which is why
we haven't seen the correction in stocks that we've seen elsewhere
this year," he said.
Sean Darby, chief global equity strategist at Jefferies, said
the firm would lift their S&P 500 target to 2,500 from 2,325,
saying as long as nominal gross domestic product is "running higher
than U.S. Treasury yields, investors should own the U.S."
Among other corporate results, Procter & Gamble Co.(PG) rose
0.9% after the Dow component posted a fourth-quarter profit that
was above expectations
(http://www.marketwatch.com/story/procter-gamble-shares-edge-up-following-q4-earnings-beat-2017-07-27).
United Parcel Service Inc. (UPS) also fell 2.3% despite its results
topping consensus forecasts
(http://www.marketwatch.com/story/ups-shares-rise-as-earnings-beat-estimates-2017-07-27).
MasterCard Inc.(MA) also reported stronger-than-expected
earnings
(http://www.marketwatch.com/story/mastercard-beats-estimates-as-consumer-spend-more-2017-07-27)
and revenue for the second quarter as consumers boosted their
spending. Shares were 0.2% lower.
Twitter (TWTR) tumbled 13% after the microblogging platform
reported lackluster user growth. The stock is on track for its
biggest one-day decline since October.
Comcast Corp.(CMCSA) posted profit and revenue that beat
analysts expectations
(http://www.marketwatch.com/story/comcast-profit-revenue-beat-analysts-expectations-2017-07-27),
and shares rose 0.5%, while Verizon Communications Inc.(VZ) gained
6% after results, helping to support the Dow.
PayPal Holdings Inc.(PYPL) shares added 2.2% after the mobile
payment group topped earnings views and raised guidance
(http://www.marketwatch.com/story/paypal-shares-up-2-after-company-tops-views-raises-guidance-2017-07-26).
After the market close, Amazon.com Inc.(AMZN) is scheduled to
report its quarterly results
(http://www.marketwatch.com/story/amazon-earnings-with-a-dominant-position-in-the-us-analysts-look-abroad-2017-07-25),
along with Expedia Inc. (EXPE), Intel Corp.(INTC), Starbucks
Corp.(SBUX) and Mattel Inc.(MAT).
Overseas companies with U.S.-listed shares were also active.
AstraZeneca PLC(AZN.LN) (AZN.LN) sank 16% after the drug
heavyweight reported a negative result in a Phase 3 clinical trial
of its lung-cancer treatment Mystic
(http://www.marketwatch.com/story/astrazenecas-mystic-cancer-drug-trial-fails-2017-07-27).
(http://www.marketwatch.com/story/astrazenecas-mystic-cancer-drug-trial-fails-2017-07-27)
Shares of rival Bristol-Meyer Squibb Co.(BMY) fell 6% after its
results.
Anheuser-Busch InBev NV(ABI.BT) (ABI.BT) moved 6.4% higher after
the brewing giant posted a surge in quarterly profit
(http://www.marketwatch.com/story/ab-inbev-profit-up-despite-drop-in-us-market-share-2017-07-27).
(http://www.marketwatch.com/story/ab-inbev-profit-up-despite-drop-in-us-market-share-2017-07-27)And
the world's largest liquor maker Diageo PLC(DEO) soared 6.6% after
lifting its target for profit margin growth
(http://www.marketwatch.com/story/diageo-full-year-earnings-lifted-by-currency-boost-2017-07-27).
Economic data: The number of Americans who applied for
unemployment benefits rose in late July but remained near the
lowest level in decades
(http://www.marketwatch.com/story/us-jobless-claims-climb-10000-to-244000-2017-07-27).
Separately, orders for durable or long-lasting U.S. goods soared
6.5% in June
(http://www.marketwatch.com/story/boeing-bonanza-durable-goods-orders-soar-65-in-june-2017-07-27).
Other markets: European stocks traded mixed
(http://www.marketwatch.com/story/european-stocks-search-for-direction-in-busy-session-for-earnings-2017-07-27)
as investors absorbed a heavy stream of earnings, while in Asia ,
equity markets were broadly positive
(http://www.marketwatch.com/story/asia-stocks-broadly-positive-nikkei-lifted-by-nintendo-2017-07-27).
Gold prices were trading higher, up $13, or 1%, to $1,262.30 an
ounce, with precious and base metals rising across the board.
The ICE Dollar Index continued to fall, last trading at 93.59,
from 94.05 late Wednesday. The dollar weakened on Wednesday, after
some analysts viewed the Federal Reserve as striking a dovish tone
in its policy statement
(http://www.marketwatch.com/story/fed-to-wind-down-bond-holdings-relatively-soon-2017-07-26).
(END) Dow Jones Newswires
July 27, 2017 09:58 ET (13:58 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.