Alphabet rallied, Apple dropped and Twitter tumbled following a mixed bag of quarterly reports from top-tier tech businesses that investors have relied on this season to power a stock market rally throughout the coronavirus pandemic.
Share swings after the reports from your tech heavyweights following the bell delivered exchange-traded funds tracking the S&P 500 and Nasdaq down approximately 1% each, suggesting Wall Street may open weaker on Friday.
Mostly upbeat effects from Facebook , Google-parent Alphabet and Amazon, along with Microsoft’s strong report earlier this week, reveal how the largest US companies have expanded their companies and also outperformed smaller rivals this year as the pandemic accelerates trends toward online shopping, video streaming and other technology.
Alphabet and Facebook both reported strong rises in advertising sales and a few warning about the long run. Facebook, which often is conservative with forecasts, stated that pandemic-related uncertainty could result in a difficult 2021.
Facebook’s stock fell 1 percent, while Alphabet jumped 7 percent.
“These results are testament to the incredible strength of the Google franchise,” said Nicholas Hyett, an equity analyst at Hargreaves Lansdown. “Where other marketing driven businesses are struggling as advertisers become more cost conscious, it seems some of the cash is in fact finding its way to the internet search giant”.
Apple dropped over 5% after its iPhone earnings missed quotes, although its quarterly earnings and profit beat analysts’ expectations.
Analysts expect aggregate S&P 500 earnings to drop 13% this quarter, compared to an increase of 4.5% in the tech sector, which includes Apple, Microsoft and many other of the index’s largest companies, according to IBES data from Refinitiv.
Twitter reported fewer new users than Wall Street expected, sending its shares 17% lower. If Twitter falls that much in Friday’s trading session it will have been its deepest one-day drop since March, when fear related to the pandemic sent global stock markets into a deep selloff.
Amazon reported a record quarterly profit and forecast a jump in holiday sales, but its shares fell almost 2% after it forecast a jump in costs related to coronavirus.
Thursday’s reports come amid turbulence on Wall Street, with soaring coronavirus cases and uncertainty about a fiscal relief bill in Washington dimming the outlook for an economic recovery and knocking over 3% off the S&P 500 so far this week.
Without Facebook, Apple, Amazon, Netflix and Alphabet – the so-called FAANG stocks – the S&P 500 would be down about 4% in 2020, compared with the index’s 2% year-to-date rise, according to a research note from Bespoke Investment Group on Thursday.
“Due to the the massive weight of these stocks and their outperformance, the market has become more reliant on them than ever before for its profits,” according to Bespoke.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Noel Randewich. Additional reporting by Munsif Vengattil in Bengalaru. Editing by Lisa Shumaker.
To stay on top of the latest developments across the platform economy and gain access to our problem-solving tools, databases and comprehensive content sets, you can become a member for just $7 per month.