Big drops in tech giants weigh on stocks on Wall Street
NEW YORK (AP) — Stocks are off to a mixed start on Wall Street as big drops in several heavyweight technology stocks weighed on major indexes, offsetting gains elsewhere in the market.
The S&P 500 was little changed of 10:40 a.m. Eastern after shaking off an early decline. The tech-heavy Nasdaq slumped 0.5% and the Dow Jones Industrial Average rose 136 points, or 0.4%, to 31,959.
Technology stocks, with their huge valuations, can have a big effect on market indexes. The drop in big tech companies weighed down the S&P 500 even though 80% of the stocks were higher.
Google’s parent company, Alphabet, slumped 7.2% after it reported disappointing third-quarter financial results as advertising sales weakened. Weak ad sales are threatening other tech and communications companies. Music streaming service Spotify fell 8% after it reported a bigger third-quarter loss than Wall Street expected.
The broader market was also dragged down by Microsoft’s 7% slide after it reported disappointing growth for its cloud computing company, while profits fell along with PC sales. Chipmaker Texas Instruments fell 3.5% after giving investors a discouraging forecast for the current quarter.
Several other big tech companies are on deck to report earnings this week. Facebook’s parent company, Meta, will report earnings later Wednesday, while Apple reports its results on Thursday.
Internet retail giant Amazon also reports its results on Thursday along with industrial bellwether Caterpillar and McDonald’s.
Long-term Treasury yields continued to pull back from their multiyear highs. Gains in those rates have sent mortgage rates sharply higher this year.
The yield on the 10-year Treasury fell to 4.02% from 4.10% late Tuesday. The two-year yield fell to 4.40% from 4.48%.
Homebuilders gained ground following an encouraging report on sales of newly built homes. Lennar rose 1.4%.
Investors are mainly focused on earnings this week, but are waiting for several economic updates as they try to get a better picture of how inflation is impacting businesses, consumers and the Fed’s plans for interest rate increases.
The government will release its first estimate on third-quarter gross domestic product report on Thursday. On Friday the government will release more data on personal income, consumption and spending.
Joe McDonald and Matt Ott contributed to this report.
Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.