May 23, 2024

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Wall Street closed lower as ad technology and social media stocks fell

Wall Street closed lower as ad technology and social media stocks fell
  • Snap Inc shares fall due to slowing growth
  • Telecom services inventories led the sectoral declines
  • AmEx raises revenue forecast on flexible card spending
  • Indices down: Dow 0.43%, S&P 500 0.93%, Nasdaq 1.87%

July 22 (Reuters) – U.S. stocks closed lower on Friday as disappointing earnings from Snap worried investors and shares of social media and advertising technology firms fell, offsetting gains from card issuer American Express after upbeat expectations.

However, the three major indices posted weekly gains despite Friday’s losses with the tech-heavy Nasdaq Index closing the week 3.3% higher. The S&P 500 advanced 2.4%, and the Dow gained 2%.

The Snapchat owner announced the weakest quarterly growth in sales as a public company, sending Snap Inc shares down about 40%, while Twitter Inc. (TWTR.N) Reversing previous losses to add 0.8% after the sudden drop in revenue. Read more

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Other online companies that rely heavily on advertising, such as tech giants Meta Platforms Inc (META.O) and Alphabet Inc (GOOGL.O) It fell 7.6% and 5.6%, respectively, weighing on the Nasdaq (nineteenth).

Meta and Alphabet are due to announce their earnings next week, along with their fellow venture capitalists, including Apple Inc. (AAPL.O)Microsoft Corporation (MSFT.O) and Inc (AMZN.O).

Communication Services S&P 500 (.SPLRCL) and information technology (.SPLRCT) They fell 4.3% and 1.4%, respectively, topping the declines among the index’s 11 sectors.

Dow Jones Industrial Average (.DJI) The Standard & Poor’s 500 Index fell 137.61 points, or 0.43%, to 31,899.29 points (.SPX) It lost 37.32 points, or 0.93%, to 3,961.63 points, and the Nasdaq Composite (nineteenth) It fell 225.50 points, or 1.87%, to 11,834.11.

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“The gains are coming in less bad than feared, but they are deteriorating from what we are and have become accustomed to over the past several quarters,” said Bob Dole, CIO of CrossMark Global Investments.

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

With 106 S&P 500 companies reporting earnings as of Friday morning, 75.5% beat analyst expectations, down from the 81% beat rate over the past four quarters, according to Refinitiv data. Read more

All eyes are on the Federal Reserve meeting and US Q2 GDP data next week. 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. 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

“Economic data is coming in weaker…kind of underscores the fact that a recession is very likely over the next 12 months. Markets are trying to figure out what that looks like with economic growth slowing dramatically. [and] “The Fed is in the midst of a very aggressive financial tightening,” said Megan Hornman, chief investment officer at Verdence Capital Advisors in Hunt Valley, Maryland.

Verizon Communications Corporation (VZ.N) It tumbled 6.8% after announcing that it had cut its forecast for adjusted annual earnings as inflation pressured. American Express company (AXP.N) It rose 1.9% thanks to strong earnings and increased revenue expectations. Read more

Volume on US exchanges was 10.38 billion shares, compared to an average of 11.53 billion for the full session over the last 20 trading days.

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Low issues outnumbered advanced issues on the New York Stock Exchange by 1.43 to 1; On the Nasdaq, the ratio was 2.49 to 1 in favor of declining stocks.

The S&P 500 hit a new 52-week high and 31 new low; The Nasdaq recorded 32 new highs and 74 new lows.

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(covering Echo Wang) in New York. Additional reporting by Shriyashi Sanyal, Aniruda Ghosh and Bansari Mayor Kamdar in Bengaluru; Editing by Sumyadb Chakrabarti, Sriraj Kalovila, Shunak Dasgupta and Aurora Ellis

Our criteria: Thomson Reuters Trust Principles.