NEW YORK (TheStreet) -- After posting a big rally on Tuesday, the S&P 500 is at it again, climbing 0.4% on Wednesday. Stock traders, however, were focused on Twitter (TWTR) - Get Report, as the stock plunged 14% to 52-week lows at $31.30.
The shares initially climbed in Tuesday's after-hours session, after the company reported second-quarter adjusted earnings and revenue that beat estimates and provided a full-year revenue growth projection that's slightly ahead of analysts' expectations.
The trouble started once the conference call began. "Holy smokes," the company has a lot of work to do, Pete Najarian, co-founder of optionmonster.com and trademonster.com, said on CNBC's "Fast Money Halftime" show. User growth is simply too slow and it's clear that it will take considerable time before it improves, he said.
Josh Brown, CEO and co-founder of Ritholtz Wealth Management, is long Twitter, but he's not optimistic. This is a "very volatile name," Brown said. The stock seems likely to break below $30 and into the $20s, where investors should consider buying it.
"I haven't seen any reason to own this stock," said Stephen Weiss, founder and managing partner of Short Hills Capital Partners LLC. The company continues to miss its own growth metrics, and the conference call was quite depressing. Weiss said he would rather buy Baidu (BIDU) - Get Report, whose stock has declined in recent trading, even the company has tremendous growth.
Facebook (FB) - Get Report seems likely to crush earnings when it reports on Wednesday after the close, added Jim Lebenthal of Lebenthal & Co. Twitter, however, reminds him of Facebook when Facebook was highly out of favor among Wall Street investors. Twitter is starting to become attractive.
Michael Block, chief strategist at Rhino Trading Partners, added that fundamental growth investors will want to see several quarters of sustainable growth before buying the stock.
Pacific Crest Research's Evan Wilson has a buy rating and $52 price target on Twitter. While user growth remains disappointing, Wilson said the company will likely name a new CEO by the fourth quarter. That person will likely get leeway from investors and may bring a breath of fresh air, Wilson said.
Turning to commodities, Jeff Currie, global head of commodities research at Goldman Sachs, said the outlook doesn't look good. He's targeting $1,050 per ounce in gold prices and $4,500 per ton for copper, as production costs fall. Supply is just too high to warrant higher prices.
He said he also expects natural-gas prices to remain under pressure, as supply continues to increase. As for oil, Currie predicts it will drop to $45 per barrel by October. Demand for gasoline has been falling over the past few weeks. And when oil prices popped higher in the spring, producers quickly ratcheted up output, which is now weighing on prices again.
Oil needs to drop to $40 for roughly six months or longer to start putting significant default risk in the high-yield market, Currie said. He still sees substantial downside risk.
Commodities prices are being weighed down by the three "Ds," which are deflation in commodities, divergence in currencies as the U.S. dollar remains strong and the deleveraging of emerging-markets debt, particularly in China, Currie concluded.
How can the Federal Reserve even think about raising rates in 2015, with the commodity crush that's occurring, Block asked. If it does, it will put more pressure on commodity prices, which will hurt inflation data.
Investors who are short commodities, particularly coal, should stay short, Weiss said. Companies such as Caterpillar (CAT) - Get Report, AGCO (AGCO) - Get Report and CNH Industrial (CNH) will also remain under pressure, he added.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.