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Wall Street closes lower as ad tech, social media stocks fall

Wall Street closes lower as ad tech, social media stocks fall
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  • Snap Inc shares fell as growth slowed
  • Communications services stocks lead to declines across sectors
  • AmEx raises revenue forecast for ongoing card spending
  • Indexes down: Dow 0.43%, S&P 500 0.93%, Nasdaq 1.87%

July 22 (Reuters) – Disappointing earnings from Snap spooked investors and lower shares of social media and ad tech firms offset gains at card issuer American Express after a positive outlook.

Still, all three major indexes posted weekly gains despite losses on Friday, while the tech-heavy Nasdaq closed the week 3.3% higher. The S&P 500 gained 2.4% and the Dow gained 2%.

The owner of Snapchat posted its weakest quarterly sales growth as a public company, sending shares of Snap Inc. down nearly 40%, while Twitter Inc. (TWTR.N) It recovered earlier losses to add 0.8% after an unexpected drop in revenue. read more

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Other online companies that rely heavily on advertising, such as tech giants Meta Platforms Inc (OBJECTIVE) and Alphabet Inc (GOOGL.O) The Nasdaq lost 7.6% and 5.6%, respectively. (.IXIC).

Meta and Alphabet are set to release earnings next week, along with their mega-cap peers, including Apple Inc. (AAPL.O)Microsoft Corp (MSFT.O) and Amazon.com Inc (AMZN.O).

S&P 500 communication services (.SPLRCL) and information technology (.SPLRCT) Among the 11 sectors of the index, it decreased by 4.3% and 1.4%, respectively.

Dow Jones Industrial Average (.DJI) The S&P 500 fell 137.61 points, or 0.43%, to 31,899.29 (.SPX) The Nasdaq Composite lost 37.32 points, or 0.93%, to 3,961.63. (.IXIC) It fell 225.50 points or 1.87% to 11,834.11.

“Earnings are less bad than we feared, but they’re worse than what we’ve gotten used to and used to over the past few quarters,” said Bob Doll, CIO of Crossmark Global Investments.

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

106 of the S&P 500 companies reported earnings through Friday morning, 75.5% of which beat analysts’ expectations, down from 81% over the past four quarters, according to Refinitiv data. read more

All eyes are on the Federal Reserve meeting and US gross domestic product data for the second quarter next week. While the US central bank is expected to raise interest rates by 75 basis points to curb runaway inflation, GDP data is likely to turn negative again. read more

Meanwhile, a survey on Friday showed that U.S. business activity fell in July for the first time in nearly two years, deepening concerns about an economy weakened by high inflation, rising interest rates and declining consumer confidence. read more

“Economic data is coming in weaker…kind of confirming that a recession is more likely over the next 12 months.” And markets are trying to figure out what that looks like with economic growth slowing significantly [and] The Fed is in the midst of fairly aggressive fiscal tightening,” said Megan Horneman, chief investment officer at Verdence Capital Advisors in Hunt Valley, Maryland.

Verizon Communications Inc (VZ.N) fell 6.8% after announcing its annual adjusted profit forecast was weighed down by inflation. American Express Co (AXP.N) rose 1.9% on strong earnings and rising revenue forecasts. read more

The stock traded 10.38 billion shares over the past 20 trading days, compared to an average of 11.53 billion shares for the full session.

Declining issues outnumbered advancing ones on the NYSE by a ratio of 1.43 to 1; A 2.49-to-1 ratio on the Nasdaq favored decliners.

The S&P 500 posted 1 new 52-week high and 31 new lows; The Nasdaq Composite recorded 32 new highs and 74 new lows.

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Reporting by Echo Wang in New York; Additional reporting by Shreyashi Sanyal, Aniruddha Ghosh and Bansari Mayur Kamdar in Bengaluru; Edited by Saumyadeb Chakrabarty, Sriraj Kalluvila, Shounak Dasgupta and Aurora Ellis

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