Why Twitter Inc, RetailMeNot Inc, and VelocityShares 3x Long Natural Gas ETN Tumbled Today

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

For those who had been hoping for a seventh straight day of gains for the Dow, Friday was a mild disappointment. Yet, even though the Dow dropped only 0.01% and the S&P followed with a 0.03% decline, many stocks posted much more dramatic declines. Twitter and RetailMeNot were among the worst performers today, as was the VelocityShares 3x Long Natural Gas ETN .

Twitter fell 13%, marking its biggest one-day decline in its short history as a public company. The social-media giant had soared earlier in the week on long-term growth hopes, but multiple analysts weighed in today with more pessimistic assessments of Twitter's future prospects. Despite the drop, Twitter stock still gained ground during the week, but many are now pointing at the microblogging site's shares as being too hot to handle. In the end, Twitter will obviously have to produce the earnings growth implied by its valuation, and that could be a tall order even for a company in the middle of a high-growth area.

RetailMeNot dropped 7%, following the trend in Internet and social-media stocks downward. The digital-coupon specialist had posted substantial gains in the last two weeks of the holiday shopping season, even amid reports of rival Coupons.com seeking to come public. But news of insider sales took the wind out of RetailMeNot's sails, and the downdraft in Twitter seemed to make investors think twice about the entire sector today.

The VelocityShares 3x Long Natural Gas ETN declined 9% on a bad day for natural gas, which fell 1% after a government report said that inventories fell 177 billion cubic feet during the week that ended last Friday. Yet, cold weather had allowed investors to anticipate the drawdown in inventories, and substantial domestic gas production continues to hold prices down somewhat. The leveraged exchange-traded product has struggled to post even a small gain for 2013, despite favorable moves in gas prices, as the way in which the ETN produces leverage has weighed on its overall performance.