Stocks fell amid news of political instability in Italy, with bond prices tumbling and both the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^SPX) posting losses of more than a percentage point.
Today's stock market
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Financial stocks were hammered on falling interest rates, with the Financial Select Sector SPDR ETF (NYSEMKT:XLF) dropping 3.3%. Emerging markets stocks also took a tumble; the Vanguard FTSE Emerging Markets ETF (NYSEMKT:VWO) fell 2.2%.
More momentum for Momo
Shares of Chinese social media company Momo soared 15.2% after the company reported accelerated revenue growth that beat expectations. Revenue jumped 64% to $435 million, solidly ahead of previous guidance of 46% to 52% growth and the analyst expectation for 49%. Adjusted earnings per share rose 57% to $0.69, while Wall Street was expecting $0.50.
Momo's growth was driven by strong gains in its live video service. Live video revenue increased 75% to $371.5 million. Paying users increased to 4.4 million from 4.1 million in the period a year ago, and average revenue per user for the service increased 46%. The company had 103.3 million monthly active users in March, a 21% increase from March 2017.
"The content ecosystem continues to improve, driving robust organic growth momentum for live streaming business," said CEO Yan Tang. "Strong topline performance, coupled with the operating leverage of our business model creates ample room for us to make significant investment for our future while maintaining a healthy profit margin."
Looking forward, Momo expects second-quarter revenue to grow 51% to 55% to a range of $470 million to $485 million, which includes $4.5 million of new revenue from its recent acquisition of rival dating service Tantan. Investors liked the pace of growth, and pushed the stock near its all-time high.
Kinder Morgan rids itself of a headache
Pipeline giant Kinder Morgan announced it had reached an agreement to sell the Trans Mountain Pipeline and the controversial expansion project associated with it to the government of Canada for 4.5 billion Canadian dollars ($3.5 billion). As part of the deal, the government agreed to finance the resumption of work on the expansion project until the transaction closes. Investors pushed shares of Kinder Morgan up almost 1% on the news.
The expansion of the oil pipeline from Edmonton, Alberta, to a port near Vancouver, British Columbia, was opposed by environmental groups and Kinder Morgan Canada (KML) faced the potential of years of legal and political challenges. On April 8, KML announced it was putting the project on hold, rather than risking billions of dollars on an outcome that was outside its control. The company set a deadline of May 31 to resolve the issue before shutting down the project completely. For its part, the Canadian government wanted the project for the sake of jobs and to open up new markets for oil from the Canadian oil sands.
Kinder Morgan expects that despite losing the profits from the existing pipeline, it still expects to meet or exceed its goal for distributable cash flow in 2018, and will improve the balance sheet by $2 billion after taxes. The company expects to pay $0.80 per share in dividends this year, $1.00 in 2019, and $1.25 in 2020. "With respect to future growth, we are confident that KMI will continue to find investment opportunities across its unparalleled network of midstream assets," said CEO Steve Kean.
With some major uncertainty off the table and a soon-to-be-strengthened balance sheet, Kinder Morgan arguably became a better buy today.