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By Nicholas
Jasinski | Thursday, February 3 Tech
Wreck. Meta
Platforms' rotten day infected technology shares broadly
today, sending the Nasdaq Composite down 3.7%—its
worst day since September 2020. The S&P 500 lost 2.4%, and the Dow
Jones Industrial Average fell 1.5%. Tech sector stocks in the S&P 500
dropped 2.9% today, while communication services sector shares—which include
Meta—tumbled 6.7%. Meta's market value decreased by more than
$230 billion today, which ranks as the biggest
one-day decline ever for a U.S. company. Shares of the
company formerly called Facebook closed down more than 26%. To put that in context, there are only about
30 S&P 500 companies worth more than Meta stock’s loss today. It’s like
wiping out the entire market value of Nike, Costco,
or Morgan Stanley in one day. In fact, the
loss was nearly triple the combined value of Facebook’s social media
competitors Snap, Twitter,
and Pinterest. Eric Savitz shared
his thoughts on Meta's latest report and what it means for
the rest of the tech sector. In short, the metaverse can’t arrive soon
enough. For Snap
and Pinterest,
however, things don't appear to be so dire. Amazon.com reported after the bell today, and got some
relief. Shares were up 17% in after-hours trading. More on that below. On deck for tomorrow morning is the January
jobs report, which is expected to be affected by the latest
wave of Covid-19. Economists on average are forecasting a gain of
165,000 nonfarm payrolls, after a gain of 199,000 in December. A miss because of Omicron likely won't be overinterpreted if it
appears to be a result of temporary pandemic-related pressures. More interesting perhaps will be the data on
workers’ average hourly earnings in January. It’s a tight labor market out
there, and businesses have been forced to pay up to attract employees. That
has contributed to the decades-high inflation readings we’ve been getting in
recent months. Average hourly earnings are expected to be
up 0.5% in January, for a year-over-year rise of 5.2%. Barron's Lisa
Beilfuss has a full preview
of what to expect and what to watch out for in the data tomorrow
morning. Finally, there were a pair of divergent
central-bank decisions across the pond today. The Bank of England increased its
key interest rate target at a second-straight meeting today, lifting it by
another quarter of a percentage point, to 0.5%. The U.K.’s central bank also
said it would begin reducing its holdings of government bonds and shrink its
balance sheet. The BoE is ahead of other major central
banks around the world in beginning to tighten monetary policy to combat high
rates of inflation—which it sees running around 6% or higher annually through
this spring. Since its first increase of the current cycle in December, U.K.
government bond yields have climbed and the British pound has moved higher
relative to other currencies. Across the English Channel, in Frankfurt
today, the European Central Bank also
met. It decided to keep its key rate unchanged, at minus 0.5%. The ECB said
previously that it would stop buying assets under its quantitative program
next month. Inflation is also running at eye-watering levels in the euro
zone, but labor markets aren't as tight as they are in the U.K., ECB
President Christine Lagarde noted today. For more on the outlook for monetary
policy in the U.K. and Europe, read the
latest reporting by Barron's Pierre
Briançon from our London bureau. |
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DJIA: -1.45% to 35,111.16 The Hot Stock: DXC
Technology +13.8% Best Sector: Consumer
Staples +0.03%
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