The Dow Jones Industrial Average (DJINDICES:^DJI) was up just five points as of 11:30 a.m. EDT. Microsoft (NASDAQ:MSFT) was one of index's worst-performing components, while tech stocks LogMeIn (NASDAQ:LOGM) and Twitter (NYSE:TWTR) were experiencing notable moves.
GDP falls short
Perhaps helping to limit the Dow Jones' gain, new data showed that U.S. GDP, the broadest measure of national economic activity, grew just 0.1% on a quarter-over-quarter basis. Economists had anticipated a gain of 1.2%.
This is a preliminary figure that will revised in the weeks ahead, but it still suggests that the U.S. economy may be weaker than otherwise anticipated. A slow-growing economy poses a risk to the stock market.
Microsoft will bring the Xbox to China
Microsoft said on Tuesday it will begin selling the Xbox One, its newest video game console, in China in September. The Chinese government had banned foreign video game consoles in 2000, but lifted the regulation earlier this year.
Given China's enormous population, entering the market offers an opportunity for Microsoft's video game division. However, sales could be limited by the relative expensiveness of the Xbox One and the limited income of the typical Chinese citizen. Video gaming is popular in China, but PC games, particularly free-to-play PC games, dominate.
LogMeIn beats expectations
Shares of LogMeIn surged more than 20% early in Wednesday's session, following a quarterly earnings report that exceeded analysts' expectations. LogMeIn's first-quarter earnings per share of $0.22 beat estimates by $0.01, while revenue of $49.02 million rose 31% on an year-over-year basis and was also better than expected. LogMeIn boosted its guidance for the fiscal year.
In its earnings call, management cited, among other things, the move to make its remote access services a premium product as helping to drive the strong earnings results.
Twitter drops after earnings
Twitter stock was down nearly 10% on a quarterly report that was far less impressive. While earnings (breakeven) exceeded analysts' expectations (a loss of $0.03), and revenue ($250 million) came in better than expected ($241 million), the company has seen a dramatic deceleration in its usage growth.
Twitter had 255 million monthly active users, up 14 million on a sequential basis, but the year-over-year growth rate has fallen dramatically. In short, Twitter's popularity growth is stalling; for a relatively new tech company, that sort of momentum loss can be devastating.