Standard & Poor’s 500 and Nasdaq decline as social media shares decline

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

Register now to get free unlimited access to Reuters.com

  • Twitter drops as revenue drops
  • Snap shares fall amid slowing growth
  • AmEx raises revenue forecast on flexible card spending
  • Indices: Dow Jones is up 0.08%, Standard & Poor’s is down 0.12%, Nasdaq is down 0.41%.

(Reuters) – The Standard & Poor’s 500 and Nasdaq fell on Friday as social media and ad technology companies led the decline after dismal quarterly revenue from Twitter and Snap, while upbeat forecasts from American Express kept the Dow afloat.

Snap shares fell 35%, a day after the Snapchat owner failed to generate revenue and refused to issue forecasts, while Twitter Inc (TWTR.N) slumped after a sudden drop in revenue. Read more

The social media segment is expected to register the slowest global revenue growth in the second quarter after the 2021 blast. Read more

Register now to get free unlimited access to Reuters.com

Online advertising giants Meta Platforms Inc (META.O) and Alphabet Inc (GOOGL.O) fell 5.5% and 2.5%, respectively, weighing on the Nasdaq (.IXIC) index.

Meta and Alphabet are due to report 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 up by American Express (AXP.N), which jumped 4% after it raised its annual revenue forecast. Read more

Investors will focus on the Federal Reserve meeting and US Q2 GDP data next week for clues about the health of the economy. While the US central bank is expected to raise interest rates by 75 basis points to curb runaway inflation, the GDP data is likely to be negative again.

Two quarters of negative GDP means the US is in a recession. Read more

Meanwhile, Friday’s survey showed that US business activity contracted for the first time in nearly two years in July, deepening concerns about a stunted economy due to rising inflation, rising interest rates and eroding consumer confidence. Read more

Overheating inflation forced Verizon Communications Inc (VZ.N) to cut its revised annual earnings forecast, sending its shares down 5.5%. Read more

However, Wall Street’s three major indexes are set to end the week with their biggest gains in nearly a month, with growth stocks doing most of the heavy lifting after markets encouraged quarterly reports from Tesla Inc and Netflix Inc (NFLX.O).

“We look to the rally rally maturing soon and the yield on the pullback and at the same time, we’re looking to increase volatility,” said Katie Stockton, founder of Fairlead Strategies, technical analysis.

“The timing for that will be natural next week with all the big profits hitting the bar 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%, at 3,994.13. The Nasdaq Composite Index (.IXIC) fell 49.86 points, or 0.41%, to 1,2009.75.

Of the 106 Standard & Poor’s 500 companies that have reported earnings so far, 75.5% have exceeded expectations. Analysts now expect the S&P 500 to grow 6.2% year-over-year for the second quarter, down from estimates of 6.8% at the start of the three-month period, according to Refinitiv data.

Advance issues outnumbered losers by 1.34 to 1 on the New York Stock Exchange. Declining issues outnumbered advancing stocks by 1.51 to 1 on the Nasdaq.

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

Register now to get free unlimited access to Reuters.com

Additional reporting by Shriyashi Sanyal and Aniruda Ghosh in Bengaluru; Edited by Sumyadb Chakrabarti and Sriraj Kalovila

Our Standards: Thomson Reuters Trust Principles.

Leave a Reply

%d bloggers like this: