Stocks fell on Friday, spurred by a combination of trade tensions and mixed earnings reports from some of the world's biggest businesses. After starting the day in positive territory, the Dow Jones Industrial Average (DJINDICES:^DJI) closed down 0.3%, and the S&P 500 (SNPINDEX:^GSPC) ended the week with a steeper 0.7% decline.
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Oil stocks led the market lower, and the SPDR S&P Oil & Gas Exploration and Production ETF (NYSEMKT:XOP) fell 2%. Meanwhile, financial stocks attempted to buck the negative trend, with the Financial Select Sector SPDR Fund (NYSEMKT:XLF) eking out a 0.2% gain.
Is Boston Beer's cup half empty?
Shares of Boston Beer fell 11% after the craft brewing leader announced mixed second-quarter results relative to expectations. Quarterly net revenue climbed 10.2% to $273.1 million, and rose 9.4% to $289.6 million excluding excise taxes. Wall Street was looking for sales of $275.5 million. On the bottom line, Boston Beer's net income declined 15.7% to $1.98 per share, well below the $2.77 most investors were anticipating.
Management noted that profitability suffered as operating expenses soared during the quarter, largely due to the timing of planned investments in brand-building. But it will continue making those investments, including capacity increases, as well as enhancements to its brewing and packaging capabilities.
On a positive note, shipment volume climbed 9% to 1.2 billion barrels, and Boston Beer's depletions -- a key industry measure for how fast its products travel from warehouses to consumer outlets -- grew 12%, accelerating from 8% last quarter on strength from its Truly Spiked & Sparkling, Angry Orchard, and Twisted Tea offerings. Samuel Adams brand volumes continued to decline, however, tempering overall growth.
Twitter's new content rules, decent earnings
Twitter stock plummeted 20.5% after the social media company offered solid second-quarter results but left investors worried about the implementation of new content rules.
Twitter's quarterly revenue grew 24% year over year to $711 million, and translated to adjusted net income of $134 million, or $0.17 per share. Analysts, on average, were expecting roughly the same earnings on lower revenue of $696.2 million.
Twitter confirmed that its monthly active users were 335 million during the quarter, up 2.8% from the same year-ago period but down from 336 million last quarter. To be fair, that trend shouldn't have been terribly surprising considering Twitter shares already fell earlier this month following reports that the company had purged millions of fake and suspicious accounts from the platform.
Still, it's hard to blame investors for worrying over the broader implications for Twitter's user growth, especially considering the company followed by telling investors that user counts will decline again in the mid-single-digit millions range in the third quarter.