Tech balance sheets dampen sentiment in US stock markets
Prices at several tech companies are plummeting. The biggest loser is Snapchat operator Snap. According to experts, TikTok, Instagram or YouTube could soon follow. Hard drive vendor Seagate also announces bad news.
Disappointing numbers from tech companies dampened sentiment on Wall Street. Of the Dow Jones index defaults gave 0.43% at 31,899.29 dots after. The largest S&P500 fell 0.93% to 3961.63 points. The Technology Exchange Index Nasdaq slipped 1.87% to 11,834.11 points. Weakening ad revenue hurt shares of operator Snapchat Instantaneous a drop of 39.14% to its lowest level in more than two years. Reportedly, sales rose 13% but fell short of expectations at $1.11 billion due to fierce competition for advertisers.
The figures reflect the uncertain economic outlook, commented analyst Ali Mogharabi of research house Morningstar. Moreover, they could be the harbinger of weak results from competitors like TikTok, Instagram or YouTube. The S&P 500 index for the communications services industry fell more than 4%.
“This could be interpreted as a red flag that profitability is under pressure as the economic environment slows,” said Lindsey Bell, strategist at Ally Invest. Also the American Short Message Service Twitter announced a surprise quarterly loss, blaming the back and forth surrounding Elon Musk’s ultimately failed buyout plans and a sluggish advertising market. The shares still gained 1.06%.
American Express stock soars
In the chip sector, investors worry about a reversal after the seller of hard drives Seagate Technology has delivered bad news. Shares fell more than 8.11% on production cuts due to weak demand. In the aftermath, the titles of the rival gave western digital and memory chip manufacturer microns up to more than six percent.
Thanks to higher sales targets, investors jumped American Express at. Shares of the credit card provider rose more than two percent. The company is targeting 23-25% growth instead of 18-20% thanks to the continued buying mood of consumers. “Some of the rising spending can definitely be attributed to inflation,” said Michael Ashley Schulman, chief investor at Running Point. Some consumers prefer to make larger purchases because wage increases have been lower than inflation.
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