Stocks opened higher and rose throughout the day. The Dow Jones Industrial Average (^DJI 0.56%) had its best day in a month and moved into the green for the year, and the S&P 500 (^GSPC -0.88%) gained almost a full percentage point.
Today's stock market
| Index | Percentage Change | Point Change |
|---|---|---|
| Dow | 1.31% | 320.11 |
| S&P 500 | 0.88% | 24.35 |
Data source: Yahoo! Finance.
Rising long-term interest rates boosted financial stocks but hurt high-yielding stocks like utilities. The Financial Select Sector SPDR ETF (XLF 1.38%) added 2.3%, while the Utilities Select SPDR ETF (XLU 1.54%) tumbled 3.1%.
As for individual stocks, Twitter (TWTR) fell on concerns over account deletions, and Helen of Troy (HELE 1.64%) jumped after the company reported earnings.
Image source: Getty Images.
Twitter drops on worries over deleted accounts
Shares of Twitter sank 5.4% after The Washington Post reported late Friday that the company is taking a hatchet to fake and suspicious accounts, deleting more than 70 million of them in May and June.
Twitter has been very clear that it intends to improve the quality of its service by attacking spam and suspicious accounts, and even announced less than three weeks ago that it had acquired a company that has tools for identifying troublemakers. The market was apparently spooked by the number of deleted accounts. Twitter doesn't report on the total number of accounts the company serves, but in the latest quarter, the company reported that it had 336 million monthly active users (MAUs), only five times the number of deleted accounts, according to the report.
The market shouldn't have been so shocked. In a blog post two weeks ago, Twitter said that as a part of its health improvement initiative, it is finding 9.9 million "potentially spammy or automated accounts" each week, up from 6.4 million per week last December, due to better tools. Assuming Twitter is getting better at identifying the bad guys, 70 million account deletions resulting from 80 million or so identified accounts would not seem to be too surprising. Most of the bad accounts would not be counted in the monthly active user metric, and the company has consistently maintained that false or spam accounts represents fewer than 5% of MAUs.
The fact that getting rid of bad accounts is actually good for the business in the long term was lost on the market today, though, with the stock giving up a little bit of the big gains it has put up this year so far.
Helen of Troy turns in a beautiful quarter
Consumer goods company Helen of Troy reported fiscal first-quarter results that blew away expectations, and shares jumped 12.7%. Net sales increased 9% to $355 million and adjusted earnings per share from continuing brands soared 32.6% to $1.87. Analysts were expecting the company to earn $1.46 on sales of $334 million.
Sales of leadership brands -- the brands the company views as having the most long-term potential, such as OXO, Honeywell, Braun, PUR, Hydro Flask, Vicks, and Hot Tools -- fueled the sales growth with an increase of 14.7%. Online channel sales also were big, growing 30.3% from the period a year earlier and now comprising a mid-teens percentage share of the total. The housewares segment had the highest sales growth, up 18.9%, with health and home sales growing 10.2% and beauty decreasing 5.8%. Gross margin increased 0.9 percentage points to 41.3% and adjusted operating margin improved 2.5 percentage points from last year to 15.6%. All three business segments had improved operating margins.
Looking forward, the company maintained its forecast for full-year sales gains of 0.4% to 2.1%, but upped its EPS guidance from a range of $7.30-$7.55 to $7.45-$7.70, well above the $7.40 Wall Street is looking for.
A solid beat-and-raise quarter was enough to get investors excited about this underfollowed stock today.
