The stock market tumbled after Meta Platforms shocked Wall Street with a poor earnings report. Meanwhile, Wall Street was focused on the 10-year Treasury yield, which shot up 6 points to around 1.83%.
The Nasdaq composite, heavily weighted in techs, sold off 2.7%. Big techs Apple, Microsoft and Alphabet slid as well but managed to hold up better. Still, the technology sector was one of the day's weakest, with the Technology Select Sector SPDR ETF down 1.6%.
The S&P 500 lost 1.7%. The Dow Jones Industrial Average fell 0.9% and the small cap Russell 2000 was off 1.3%. Volume fell on the NYSE and Nasdaq compared with the same time on Wednesday.
With Thursday's declines, the major indexes are on pace to end their four-day win streaks. As The Big Picture noted, market volatility makes for difficult trading, even if the latest market signals have been positive. IBD's market outlook earlier this week moved up to "confirmed uptrend."
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 35303.60 | -325.73 | -0.91 |
| S&P 500 | (0S&P5) | 4511.32 | -78.06 | -1.70 |
| Nasdaq | (0NDQC ) | 14028.78 | -388.77 | -2.70 |
| Russell 2000 | 198.73 | -2.61 | -1.30 | |
| IBD 50 | 38.20 | -0.62 | -1.60 | |
Last Update: 12:12 PM ET 2/3/2022 |
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The rate-setting Monetary Policy Committee agreed to lift the Bank of England's policy rate to 0.5% from 0.25%, saying they expect England's annual inflation to accelerate above 7% within months due to low unemployment, rising wages and surging energy prices, according to a report by Dow Jones. The move by the BOE is closely watched by investors in the U.S. to see how the Federal Reserve might react when it meets next month.
Techs Slide On Meta Earnings
Meta Platforms plummeted 25% after fourth-quarter results came in well below estimates, and the company's outlook was poor. The parent of Facebook is now trading at the lowest level since July 2020. Meta is the sixth largest company in the Nasdaq and S&P 500.
Meta's loss of $219.7 billion in market cap so far today would make it the largest single-day market value decline on record among U.S. companies, according to Dow Jones Market Data.
Many of Facebook's major clients, such as Apple, are finding that online ads are less effective now because of privacy changes. Meta raised that concern as well. "We believe competitive services are negatively impacting growth, particularly with younger audiences," CFO Dave Wehner said in Wednesday's Q4 earnings call. TikTok was the only competitor mentioned by name.
Spotify Technology late Wednesday met fourth-quarter expectations for new subscribers, but its guidance for the current quarter missed views. The stock sold off 15% Thursday morning. The music streaming and podcast provider is also dealing with podcaster Joe Rogan's controversial views on Covid-19.
Qualcomm Beats Forecasts
Qualcomm easily beat December-quarter expectations and gave bullish guidance for the current quarter. Still, Qualcomm stock fell 5%, wiping out most of Wednesday's 6.3% jump.
The wireless-chip maker said it earned an adjusted $3.23 a share on sales of $10.7 billion in its fiscal first quarter ended Dec. 26. Analysts had expected Qualcomm earnings of $3.01 a share on sales of $10.44 billion, according to FactSet. On a year-over-year basis, Qualcomm earnings rose 49% while sales climbed 30%.
"Our record quarterly results reflect the strong demand for our products and technologies," Chief Executive Cristiano Amon said in a news release. "We are at the beginning of one of the largest opportunities in our history, with our addressable market expanding by more than seven times to approximately $700 billion in the next decade."
Snapchat parent Snap plunged 19% ahead of its earnings report after the close today. Twitter fell nearly 7%. Global X Social Media ETF lost about 6%, extending a seven-month declining trend.
Parker-Hannifin, a machinery and industrial equipment maker, jumped 5% Thursday and approached its buy point of 335.08 off a flat base pattern.
Alternative asset manager KKR continued to climb today, jumping 5.7% in advance of its earnings next week. KKR is building a new base on a 13-week consolidation toward an 84 buy point. Meanwhile, rival Blackstone fell more than 3% and is below the 136.56 buy point it topped on Wednesday.
ConocoPhillips inched higher after the energy leader reported its fourth-quarter results. ConocoPhillips shares are extended sharply beyond a 78.08 buy point.
Amazon Earnings Are Next
The major earnings reports continue after today's close with Amazon.com due. Investors will be watching how the e-commerce company is handling worker shortages and strained supply chains. Analysts expect adjusted earnings of $3.72 a share, down 7% from the year-ago period, on sales of $137.7 billion, up 10%. The stock has been in a downtrend for months. Amazon stock tumbled nearly 7% Thursday morning.
Innovator IBD 50 ETF came down 1.3%.
Initial claims for jobless benefits fell to 238,000 last week from a revised 261,000. The new number was better than economists expected, based on the Econoday estimates. The good news was too little to please a grouchy stock market.
Follow Michael Molinski on Twitter @IMmolinski
