Nasdaq, S&P 500 fall as Alphabet slumps

nasdaq,-s&p-500-fall-as-alphabet-slumps
Nasdaq, S&P 500 fall as Alphabet slumps

The tech-heavy Nasdaq and the S&P 500 experienced declines on Wednesday due to Alphabet’s cloud division missing revenue estimates. This, along with rising U.S. Treasury yields, also put pressure on other mega-cap stocks.

Alphabet, the parent company of Google, saw a 9.1% drop in its stock price, reaching a three-month low. The slow growth of its cloud business contributed to this decline, marking its weakest performance in at least 11 quarters.

The communication services sector also suffered, with a 5.2% decrease, making it the worst single-day drop in a year. It reached a near one-month low.

In contrast, Microsoft’s stock rose by 2.7% to a three-month high after surpassing expectations for first-quarter results in all segments, including its cloud business.

Edward Moya, senior market analyst at OANDA, commented on the situation, stating that Google’s cloud revenue did not benefit from generative AI as anticipated. Additionally, the surge in Treasury yields and mixed earnings led stock investors to sell their shares.

Other mega-cap stocks like Apple and Amazon.com were also affected by these market conditions.Shares of Amazon (AMZN.O) and Alphabet (META.O) declined by 1% and 4.8% respectively, as Treasury yields increased due to the acceleration of new home sales in September. This data confirms the expectation of high interest rates continuing into 2024.

The focus will be on Meta Platform’s (META.O) results, with the company projected to report its strongest quarterly sales growth in almost two years. However, the company’s shares were down 2.6% amidst the broader decline in the tech sector.

Consumer discretionary (SPLRCD) and real estate (SPLRCR) sectors were among the hardest hit in the S&P 500, while utilities (SPLRCU) experienced the highest gains.

The Dow Jones Transport Average index (DJT) reached a more than four-month low following a 5.6% decrease in trucking firm Old Dominion Freight Line’s (ODFL.O) quarterly results.

General Dynamics (GD.N), a defense contractor, saw a 3.6% increase in third-quarter revenue.

According to LSEG data, 80% of the 146 S&P 500 companies that have reported so far have exceeded analysts’ earnings expectations. Quarterly earnings are expected to grow by 2.6% year-on-year.

Israel has agreed to postpone an anticipated invasion of Gaza to allow the United States to deploy missile defenses in the region for the protection of U.S. troops, as reported by the Wall Street Journal.

At 12:10 p.m. ET, the Dow Jones Industrial Average (DJI) was up by 0.54 points at 33,141.92, while the S&P 500 (SPX) was down by 45.00 points.The S&P 500 (.SPX) and Nasdaq Composite (.IXIC) experienced declines of 1.06% and 1.83% respectively, with the S&P 500 closing at 4,202.68 and the Nasdaq Composite closing at 12,899.76.

Throughout the week, investors will be keeping an eye on third-quarter gross domestic product, durable goods, and personal consumption expenditure data.

Ahead of their decision on interest rates on November 1, U.S. Federal Reserve officials were in a media blackout.

Texas Instruments (TXN.O) saw a 3.6% drop after the company forecasted fourth-quarter revenue and profit below estimates.

CoStar Group (CSGP.O) experienced a 6% decline as the real estate information provider trimmed its annual revenue outlook.

On the NYSE, declining issues outnumbered advancers with a ratio of 2.85-to-1, while on the Nasdaq, the ratio was 2.33-to-1.

The S&P index did not reach any new 52-week highs but had 58 new lows, while the Nasdaq had 14 new highs and 373 new lows.

This article was reported by Ankika Biswas and Shashwat Chauhan in Bengaluru and edited by Savio D’Souza and Shounak Dasgupta.

Our reporting adheres to The Thomson RushHourDaily Trust Principles.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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