What Happened in the Stock Market Today

By Demitrios Kalogeropoulos Markets Fool.com

Stocks fell on Thursday, but ended with only slight declines after dropping more steeply early in the session. By the closing bell, the Dow Jones Industrial Average(DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) indexes had each shed less than 0.25%.

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Today's stock market

Index

Percentage Change

Point Change

Dow

(0.11%)

(23.69)

S&P 500

(0.22%)

(5.19)

Data source: Yahoo! Finance.

Financial stocks led all sectors in trading volume, and the Financial Select Sector SPDR ETF (NYSEMKT: XLF) trailed the broader market with a 0.6% drop. Gold prices rose to help the VanEck Vectors Gold Miners ETF (NYSEMKT: GDX) add 2%.

As for individual stocks, Snap (NYSE: SNAP) and Pegasystems (NASDAQ: PEGA) made big moves following the companies' quarterly earnings reports.

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Image source: Getty Images.

Snap's user growthdisappoints

In the wake of Snap's first quarterly announcement as a public company, investors pushed the stock down 21%, as sales and user growth failed to meet Wall Street's high expectations. Revenue soared, rising nearly 300% from a tiny base of just $38.8 million in the year-ago period. Net losses ballooned to $2.2 billion, though, thanks to stock-based compensation charges tied to the social media specialist's March IPO. On an adjusted basis, losses roughly doubled to $188.2 million from $93.2 million in the year-ago quarter. Both the top- and bottom-line figures came in below consensus estimates.

Snap managed a solid boost in average revenue per user, but it added just 8 million new users during the quarter to land at 166 million daily active users. That marked the third consecutive quarter of slowing user growth, with the expansion pace falling to 36% from 48% in the prior quarter and 62% in the third quarter of 2016.

It's far too early to judge whether the company's new advertising platform will be a success. And as the base of picture and video fans increases, it's only natural that the growth rate will slow over time. However, investors had higher hopes that Snap would aggressively add to its user base even as it scales up its ad-based monetization plans.

Pegasystems returns to strong sales gains

Shares of business management software specialist Pegasystems jumped 10% following surprisingly strong first-quarter results. The company announced sales growth of 25%, which was its first acceleration in a year and also its best expansion pace in over five years. Profitability improved, too, as net income soared 160% to $27 million.

"We got off to a strong start in 2017," CEO Alan Trefler said in a press release, "and we're happy with our performance globally."

Image source: Pegasystems.

Pegasystems is benefiting from a shift away from perpetual software licenses to term-based cloud subscriptions. That move has lowered sales growth recently, but promises to generate more predictable revenue gains ahead.

Quarterly growth numbers can swing wildly based on the timing of a few big contracts, and that's likely the reason why executives didn't change their forecast, which predicts a 15% revenue improvement for the full year. Meanwhile, Pegasystems has its work cut out for it as it battles for market share in the competitive customer relationship management segment that's home to deep-pocketed leaders like salesforce.com.

Its sales team has solid momentum at its back right now, though, heading into the company's huge technology conference in early June, where Pegasystems likely will show off new productivity offerings while aiming to broaden its customer base.

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Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends Pegasystems and Salesforce.com. The Motley Fool has a disclosure policy.