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By Nicholas
Jasinski | Friday, October 22 Tech
Wreck. Technology stocks sold off
today, but the Dow Jones
Industrial Average, S&P
500, and Nasdaq Composite all still ended the week in positive
territory—and with the Dow at a record high, its 36th of 2021 and the first
since Aug. 16. It was a
nasty day for shares of online advertising-exposed companies in particular,
following Snap's
slower-than-expected revenue growth and disappointing guidance last
night. The Snapchat-parent blamed the weakness on recent changes by Apple that
make it more difficult to track iPhone users’ activity across apps and
websites. That was taking a larger bite out of advertising revenue than it
had expected. As a result,
Snap stock has tumbled 26% today, while other online advertisers got hit too.
Google-parent Alphabet slid 3%, Facebook dropped 5.1%, Twitter fell 4.8%, and Pinterest slumped 5.4%. We'll hear
from Facebook on Monday evening, when it reports third-quarter results,
followed by Alphabet and Twitter on Tuesday. In the meantime, Eric
Savitz has more analysis here. Intel also had a rough post-earnings trading
session, losing 11.7%—making it the worst performer in the S&P 500 today.
The chip maker fell short of
revenue forecasts in the most recent quarter and said it was
losing PC business because of component shortages. Intel's CFO will also
leave the company in May. Those
declines sent the S&P 500 communication services sector down 2.2% today
and technology down 0.4%. The tech-heavy Nasdaq lost 0.8%. The more
cyclically oriented Dow ticked up 0.2%. The S&P
500 finished the day down about 0.1%, although some 330 of its components
rose today. Barron's Jacob
Sonenshine put it
succinctly today: "Over a quarter of the S&P 500’s total
market capitalization is from technology companies, so when their shares
decline, they usually bring the S&P 500 down with them, too." Still, all
three major large-cap indexes plus the small-cap Russell
2000 finished the week solidly in the green,
rising at least 1% over the past five days. Over in the bond market, the
yield on the 10-year Treasury note added
0.08 percentage point this week, to end at 1.654%. It had briefly topped
1.7% on Thursday, for its highest level since April. Next week
will be a busy one for investors and analysts, with nearly a third of the
S&P 500 on deck to report earnings. We'll also get a first look at
third-quarter U.S. gross domestic product on Thursday. Watch our TV
show on Fox Business Fridays at 9 p.m. or 10:30 p.m. ET; Saturdays at 11
a.m.; or Sundays at 10 a.m. or 11:30 a.m. ET. This week, more on Facebook and
big tech earnings, including an interview with investor Roger McNamee. |
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DJIA:
+0.21% to 35,677.02 The Hot
Stock: SVB Financial +6.8% Best Sector:
Financials +1.4% |
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