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S&P 500 and Nasdaq drop as social media stocks plunge

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York, USA, July 21, 2022. REUTERS/Brendan McDermid

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  • Twitter falls due to falling revenue
  • Snap stock falls as growth slows
  • AmEx raises revenue forecast on resilient card spending
  • Indices: Dow up 0.08%, S&P down 0.12%, Nasdaq down 0.41%.

July 22 (Reuters) – The S&P 500 and Nasdaq fell on Friday as social media and ad tech companies tumbled after dismal quarterly earnings from Twitter and Snap, while an upbeat American Express outlook kept the Dow afloat.

Snap shares fell 35% the day after Snapchat’s owner missed its earnings target and declined to make predictions, while Twitter Inc (TWTR.N) shares tumbled after an unexpected drop in earnings. read more

The social media sector is expected to show the slowest growth in global revenue in the second quarter after a sharp jump in 2021. read more

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Shares of online advertising giants Meta Platforms Inc (META.O) and Alphabet Inc (GOOGL.O) fell 5.5% and 2.5% respectively, hurting the Nasdaq (.IXIC) index.

Meta and Alphabet will post their earnings next week along with Big Tech peers including Apple Inc (AAPL.O), Microsoft Corp (MSFT.O) and Amazon.com Inc (AMZN.O).

The Dow Jones Industrial Average (.DJI) was lifted by American Express Co (AXP.N), which jumped 4% after raising its full-year revenue guidance. read more

Investors are focusing on the Federal Reserve meeting and US second-quarter gross domestic product data next week to get a sense of the health of the economy. While the US central bank is expected to raise interest rates by 75 basis points to curb runaway inflation, GDP data is likely to be negative again.

Two-quarters of negative GDP means the United States is in recession. read more

Meanwhile, Friday’s review showed that US business activity declined for the first time in almost two years in July, fueling concerns about an economy slowed down by high inflation, rising interest rates and declining consumer confidence. read more

Hot inflation forced Verizon Communications Inc (VZ.N) to lower its full-year adjusted earnings forecast, sending its stock down 5.5%. read more

However, Wall Street’s three major indexes were set to end the week with their biggest gains in almost a month, with growth stocks doing most of the hard work after markets cheered on quarterly earnings from Tesla Inc and Netflix Inc (NFLX.O).

“We expect the aid rally to mature soon and yield gains on the pullback, while at the same time we expect volatility to increase,” said Cathy Stockton, founder of technical analysis firm Fairlead Strategies.

“And the timing for that would be natural next week when all the big gains hit the tape and the FOMC announcement.”

At 9:58 am ET, the Dow Jones Industrial Average (.DJI) was up 26.11 points, or 0.08%, at 32,063.01, while the S&P 500 (.SPX) was down 4.82 points. or 0.12%, up to 3994.13. The Nasdaq Composite (.IXIC) fell 49.86 points, or 0.41%, to 12,009.75.

Of the 106 S&P 500 companies that have reported earnings so far, 75.5% have beaten expectations. Analysts now forecast S&P 500 earnings will rise 6.2% year-on-year in the second quarter, compared with an estimate of 6.8% at the start of the three-month period, according to data from Refinitiv.

Advancing issues outnumbered those that fell by a ratio of 1.34 to 1 on the NYSE. Falling issues outnumbered rising issues by a ratio of 1.51 to 1 on the Nasdaq.

The S&P recorded one new 52-week high and 30 new lows, while the Nasdaq recorded 17 new highs and 21 new lows.

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Reporting by Shreyashi Sanyal and Aniruddha Ghosh from Bangalore; Edited by Somyadeb Chakrabarti and Sriraj Kalluvila

Our Standards: Thomson Reuters Trust Principles.

#Nasdaq #drop #social #media #stocks #plunge

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