U.S. stocks decline on Fed bets as Twitter surges; euro weakens

U.S. stocks and commodities slid as faster economic growth spurred concern the Federal Reserve will scale back stimulus sooner than expected, while Twitter Inc. surged in its trading debut. The euro fell, while the region’s bonds rose, as the European Central Bank cut interest rates.

The Standard & Poor’s 500 Index declined 1.1% to 1,750.32 at 3:18 p.m. in New York, for the biggest drop in a month. Twitter rallied as much as 93%. The euro lost 0.7% to $1.3421 after earlier sliding as much as 1.6%, the most in almost two years. The Stoxx Europe 600 Index was little changed, erasing earlier gains, while yields on 10-year Spanish and Italian bonds dropped at least 10 basis points. Ten- year Treasury yields declined four basis points to 2.61%. Gold lost 0.7% as the S&P GSCI Index of commodities fell below its weakest closing level since April.

The U.S. economy expanded at a 2.8% annualized rate, more than the median forecast for 2% growth. The government’s October employment report is tomorrow. ECB policy makers cut their benchmark interest rate to a record as a drop in inflation to the slowest pace in four years threatened the mission to keep prices stable.

“The market will be volatile,” Ernie Cecilia, chief investment officer at Bryn Mawr Trust Co. in Bryn Mawr, Pennsylvania, said in a phone interview. His firm oversees about $7 billion. “You had some good economic news today and we’ll see what the payrolls numbers are tomorrow. The fear is that with better-than-expected economic numbers, tapering will commence sooner rather than later.”

Earnings Season

More than a dozen S&P 500 companies release earnings today. The S&P 500 climbed 0.4% yesterday to the highest close in a week. Earnings beat estimates at 74% of the 441 companies in the S&P 500 that have released results so far, and 54% topped revenue estimates, according to data compiled by Bloomberg.

Twitter rose as high as $50.09 after raising $1.82 billion in its initial public offering by selling 70 million shares at $26 yesterday.

The microblogging service picked a price that values it higher than rival Facebook Inc. and still drew more interest than anticipated. The San Francisco-based company, which is unprofitable and has one-fifth as many users as Facebook, is benefiting from investors’ thirst for companies that will grow quickly in expanding markets like mobile advertising.

U.S. Movers

Qualcomm Inc. dropped 4.8% after the largest maker of smartphone chips predicted quarterly sales that missed analysts’ estimates. Whole Foods Market Inc. slumped 11% after cutting its profit forecast. J.C. Penney Co. jumped 5.9% after posting its first rise in monthly same-store sales in two years.

About three stocks dropped for every two that rose in the Stoxx Europe 600. Commerzbank AG, Germany’s second-biggest lender, rallied 10% to the highest level since March as third-quarter net income unexpectedly rose. Siemens AG, Europe’s largest engineering company, climbed 3.4% after profit beat analyst forecasts. Swiss Re Ltd. rallied 1.9%, the most in two months, after earnings exceeded predictions.

CGG SA tumbled 8.2% in Paris as the largest seismic surveyor of oilfields cut its revenue forecast. Securitas AB, the world’s second-biggest guarding services provider, slid 5.6%, the most in 15 months, as earnings missed analyst projections.

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