Yelp Jumps on Earnings, but Linkedin Gets Left Out

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Stocks jumped today as a strong earnings report from Disney, and improved employment numbers, gave investors an upbeat feeling heading into tomorrow's official jobs report. Stocks have been particularly volatile thus far in 2014, so today's gains may be as attributable to exaggerated swings in the market as anything else. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) finished up 188 points, or 1.2%, as all three major indexes increased more than 1%. Initial jobless claims fell to 331,000 last week, down from 351,000 the week before, and slightly better than the 335,000 that analysts expected. Tomorrow, the market is expecting the Department of Labor to report that 175,000 jobs were added in January, though those numbers could be diminished due to bad weather. Disney, meanwhile, jumped 5.3% after a top-notch earnings report, led by the success of the movies Frozen and Thor. Earnings jumped 33%, to $1.04, much better than estimates at $0.92, as every segment saw increasing profits.

Also jumping today was Yelp (NYSE: YELP  ) , which gained 19% after an unexpectedly strong outlook and earnings report. The user-generated review site said average visitors increased 39% in the quarter, to 120 million, and reviews written jumped 47%, to 53 million. The company has also branched out into new services for businesses, including food ordering and revenue estimation, helping it provide better-than-expected guidance for 2014. Those new business segments are a major reason why it now expects sales to grow more than 50%, to $353 to $358 million, better than expectations of $347.9 million.

Elsewhere in social-media stocks, Linkedin (NYSE: LNKD  ) shares were down 8% after its own outlook missed the mark. The professional networking site said membership improved 7% sequentially, to 277 million, and posted quarterly results ahead of estimates as revenue increased 47%, to $447.2 million for an adjusted EPS of $0.39, better than estimates of revenue at $437.8 million and EPS of $0.38. However, Linkedin carries a high price because of its future prospects, and the company said it only sees revenue of $2.02 billion to $2.05 billion in 2014, below the consensus at $2.16 billion. Since its IPO, Linkedin shares have appreciated more than 400%, giving it a market cap close to $25 billion. At a valuation like that, Linkedin needs to start delivering on the bottom line.

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