Wall St Posts 4th Straight Gain, Meta Earnings Shake Social Media After Hours
- Alphabet rises on bullish sales and stock split
- AMD Leaps on Strong Outlook and Earnings; chip manufacturers elevators
- PayPal slips on weak first-quarter outlook
- Closing indices: Dow 0.63%, S&P 0.94%, Nasdaq 0.50%
Feb 2 (Reuters) – All three Wall Street benchmarks ended higher on Wednesday, rising for a fourth straight session after a rocky start to the year, helped by upbeat earnings at Google’s parent company Alphabet and from chipmaker Advanced Micro Devices.
But the mood looked sour in post-trade trading when shares of Facebook owner Meta Platforms Inc (FB.O) plunged as much as 22% after it missed Wall Street earnings estimates and issued weaker forecasts. provided that.
“It’s a sign of slowing growth, and people don’t like to see that with growth stocks,” Peter Tuz, president of Chase Investment Counsel in Charlottesville, Va., said of the giant’s results. social media.
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Other social media companies also fell after the bell, including Twitter (TWTR.N), Pinterest (PINS.N) and Spotify (SPOT.N), which also posted disappointing results Wednesday night. Read more
Nasdaq futures fell 1.8% and S&P 500 futures lost 0.7%, signaling traders expect Wall Street to fall on Thursday.
In the regular session, Alphabet (GOOGL.O) rose 7.5% after reporting record quarterly sales on Tuesday, and said it plans to undertake a 20-to-one stock split. decision that Neil Wilson, chief market analyst for Markets.com, said should make it more attractive to retail investors. Read more
Meta (FB.O) rose slightly ahead of its earnings report, while Amazon.com Inc fell 0.4% ahead of its earnings report due Thursday.
Last month, the tech-heavy Nasdaq (.IXIC) fell 19% from its all-time high in November as investors dumped popular growth stocks on prospects of faster-than-expected rate hikes. foreseen.
Traders are betting on five rate hikes this year after hawkish comments from the US Federal Reserve in January.
“There’s a huge chunk of the tech market, and the growth market, that drives pretty extreme multiples, which probably needs some air out of the tires,” said Jason Pride, director of Private wealth investments at Glenmede, adding such a move was “sound”.
An exception to this, he argued, would be the five or six biggest tech names, given their more modest valuations and better fundamentals.
Technological benefits provide an opportunity for this to happen, with ripple effects felt by peers.
Advanced Micro Devices Inc (AMD.O) climbed 5.1% after the company on Tuesday forecast 2022 revenue to beat expectations, following strong quarterly demand for its semiconductors, despite global supply challenges. Read more
The positive sentiment spread to other chipmakers, including Nvidia Corp (NVDA.O), Qualcomm Inc (QCOM.O) and Micron Technology Inc (MU.O), which rose between 2.5% and 6.3%.
However, PayPal Holdings Inc (PYPL.O) fell 24.6% after forecasting first-quarter revenue and profit well below expectations.
As a result, other fintech and payments companies were dragged lower, with Block Inc (SQ.N), Affirm Holdings Inc (AFRM.O) and SoFi Technologies (SOFI.O) falling between 8.4% and 10.6%. Read more
Overall, the only major S&P sector that finished lower was Consumer Discretionary (.SPLRCD), which fell 0.5%. Communication Services (.SPLRCL) led the gains, thanks to the performance of Alphabet. It was also helped by Match Group Inc (MTCH.O), which rose 5.3% as investors picked up the Tinder owner on the belief that the Omicron variant wouldn’t impact its business as much. than previously feared.
Only Consumer Discretionary was down, down xx%.
The Dow Jones Industrial Average (.DJI) rose 224.09 points, or 0.63%, to 35,629.33, the S&P 500 (.SPX) gained 42.84 points, or 0.94%, to 4,589.38 and the Nasdaq Composite (.IXIC) added 71.54 points, or 0.5%, to 14,417.55.
Markets in 2022 have been choppy as investors seek to position themselves for a rate hike to fight inflation, as well as lingering pandemic influences on the economy and geopolitical tensions in Europe.
“The markets are trying to piece it all together,” Pride said. “It almost feels like a ‘deer in the headlights’ effect right now, where there’s too much cross-current to try and triangulate quickly.”
He added that the market should rebound in the immediate future as investors assimilate these various data.
An unexpected drop in private payrolls on Wednesday helped keep U.S. Treasury yields steady as investors weighed its potential impact on Friday’s broader jobs report.
Banks including JP Morgan Chase & Co (JPM.N), Citigroup Inc (CN) and Bank of America Corp (BAC.N) lost ground, falling between 0.1% and 0.8%.
Volume on U.S. exchanges was 11.06 billion shares, compared to an average of 12.43 billion for the full session over the past 20 trading days.
The S&P 500 posted 27 new 52-week highs and two new lows; the Nasdaq Composite recorded 48 new highs and 67 new lows.
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Reporting by Bansari Mayur Kamdar and Medha Singh in Bengaluru, David French and Alden Bentley in New York and Noel Randewich in Oakland, California; Editing by Shounak Dasgupta and Lisa Shumaker
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