Both Pandora (NYSE: P ) and OmniVision Technologies (NASDAQ: OVTI ) are plays on the growth of mobile computing -- the former for the Internet music that mobile devices enable, and the latter for the optics hardware that tablets and smartphones demand. Yet, they headed in very different directions Wednesday morning -- Pandora was surging, while OmniVision Technologies got absolutely crushed during a session that was slightly positive for the broader market. The Dow Jones Industrial Average (DJINDICES: ^DJI ) was up nearly 40 points as of 11:15 a.m. EST, with Dow component Microsoft (NASDAQ: MSFT ) outperforming the market.
Data suggests jobs market is improving
The ADP Nonfarm Employment report came in better than expected, showing an increase of 215,000 jobs -- more than the 173,000 that was expected. As a major processor of payrolls, ADP is uniquely equipped to offer a snapshot of the U.S. labor market, as its data is derived from some 400,000 U.S. businesses. However, ADP's report is not the ultimate measure of the labor market -- the official, nonfarm payroll report released on Friday is generally given significantly more weight.
Still, a positive ADP report is a good sign, and may have helped lift markets early on Wednesday.
Microsoft buoyed by PC projection
Microsoft shareholders were beating the Dow Jones after projections from IDC revealed that the ongoing slump in PCs may be coming to a close. Although IDC believes 2014 will be another year of contraction, the firm expects some recovery in the PC market in 2015, with PC shipments ultimately bottoming out around 300 million units annually.
That's certainly good news for Microsoft, whose efforts at breaking into the mobile market have mostly fallen short. Sales of Windows-based tablets have lagged Android and iOS devices, and the long-term viability of Microsoft's Windows operating system has been called into question by the popularity of mobile form-factors.
Pandora rallies on listener metrics
Pandora's rise was far more substantial than Microsoft's, with shares gaining nearly 6% early on Wednesday. Pandora shares were likely benefiting from an increase in listener hours -- the company announced that, during November, listener hours increased 18% from the prior year. Moreover, Pandora's share of the entire U.S. radio market increased to 8.44% from 7.17% last year, while total active listeners increased 16%.
Reacting to the numbers, analysts at Piper Jaffray viewed the stock favorably, noting that Pandora seemed to be beating back competitive threats. Piper Jaffray reiterated its $37 price target.
OmniVision earnings come in disappointing
In contrast to Pandora's gain, OmniVision's tumble was even more severe, with shares dropping as much as 12% in the pre-market, before bouncing back early in trading. Still, OmniVision was down more than 7% early on Wednesday following a disapointing earnings report.
The catalyst for the move lower seems to have been the firm's guidence -- the company expects to earn $0.28-$0.44 in the third quarter on revenue of $310-$340 million. Prior to the release, analysts had been a bit more optomistic for OmniVision's future, projecting earnings per share of $0.43 on revenue of about $400 million.
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