US stocks were mostly lower on Tuesday after social media giant Snap Inc. (SNAP) posted its biggest one-day drop on record and dragged shares of tech peers.
The Nasdaq Composite fell 2.3% to its lowest close since November 2020 after an economic warning from the social media platform sent the company’s shares down. down 43% and spurred a sell-off in the broader tech sector. The S&P 500 fell 0.8%, sending the index back into a bear market after a brief lull to start the week. The Dow Jones Industrial Average gained 50 points after reversing earlier losses in the final hour of trading.
The drop comes after Snap Inc. Chief Executive Evan Spiegel cut the company’s forecast, citing rising inflation and interest rates, supply chain constraints and labor disruptions.
Snap’s decline also spurred a selloff in tech peers. Metaplatform Actions (Facebook) fell 7.6% and shares of Alphabet (GOOG) declined 5% to a 52-week low.
The moves extend a wild swing in stocks after a brief suspension on Monday, but build on a broader downtrend amid months of selling on Wall Street. Monday’s close marked just the 13th time in 98 trading days this year the S&P 500 closed in positive territory, according to data from Bespoke Investment Group.
The social media giant is the latest in a growing number of US companies to downgrade their outlook on concerns that macroeconomic pressures are about to weigh on margins. Last week, a group of disappointing earnings from major retailers affirmed fears that inflation and continued supply chain problems were weighing on corporate balance sheets.
“There will certainly be a recovery from the pandemic-induced increase in profits that many companies experienced, but that recovery could be larger than initially thought,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments in a note sent by email. “Businesses must deal with higher input costs, consumers put off by high prices and changing spending patterns.”
The story continues
During the first-quarter earnings season, 338 of the 460 S&P 500 companies that have reported results so far mentioned the term “supply chain” during calls with investors, the third-highest number of times since at least 2010 , FactSet research indicated With results coming out this week from consumer names like Macy’s (M), Dick’s Sporting Goods (DKS), and Ulta Beauty (ULTA), Wall Street is bracing for more bad news.
On the economic front, sales of new homes in the United States fell by the most in nearly nine years to the lowest impression since the start of the COVID-19 pandemic. The downturn comes as high construction costs and rising mortgage rates weigh on affordability.
More data from Washington is in line for investors until Friday, with a second estimate of first-quarter US GDP due later this week, along with a new reading on monthly personal consumption expenditures (PCE ), the Federal Reserve’s preferred measure of inflation. .
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4:00 PM ET: S&P falls 0.8%, Dow gains 50 points, Nasdaq falls 2.3%
Here were the top market moves as of 4:00 pm ET:
S&P 500 (^GSPC): -31.78 (-0.80%) to 3,941.97
Dow (^DJI): +50.82 (+0.16%) to 31,931.06
Nasdaq (^IXIC): -270.83 (-2.35%) to 11,264.45
Crude (CL=F): -$0.10 (-0.09%) to $110.19 a barrel
Gold (GC=F): +$17.10 (+0.93%) to $1,864.90 per ounce
10-year treasury (^TNX): -9.9 bp to get 2.7600%
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1:20 PM ET: S&P down 1.8%, Dow down 300 points, Nasdaq down 3.2%
Here were the top moves in the markets as of 1:20 PM ET:
S&P 500 (^GSPC): -74.69 (-1.88%) to 3,899.06
Dow (^DJI): -298.30 (-0.94%) to 31,581.94
Nasdaq (^IXIC): -371.37 (-3.22%) up to 11,163.91
Crude (CL=F): -$0.63 (-0.57%) to $109.66 a barrel
Gold (GC=F): +$16.80 (+0.91%) to $1,864.60 per ounce
10-year treasury (^TNX): -12.4 bp for a return of 2.7350%
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10:58 am ET: New home sales fall to lowest since early 2020
U.S. new home sales fell by the most in nearly nine years to the lowest print since the start of the COVID-19 pandemic. The downturn comes as high construction costs and rising mortgage rates weigh on affordability.
U.S. new home sales sank 16.6% month-on-month to a seasonally adjusted annual rate of 591,000 in April 2022. The figure marks the lowest impression in two years and is below of the 750,000 economists surveyed by Bloomberg who had predicted.
The March sales pace was also revised downward to 709,000 units from the previously reported 763,000 units.
“The macroeconomic environment has deteriorated faster than we thought just a month ago, with new home sales falling under the weight of higher financing costs and home valuations, where even the cost of gas homebuyers put in the car to visit new homes is skyrocketing,” FWDBONDS Chief Economist Christopher Rupkey said in a note.
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9:34 am ET: Stocks resume losses as strong sell-off continues on Wall Street
Here were the main market moves in early trading on Tuesday:
S&P 500 (^GSPC): -40.20 (-1.01%) to 3,933.55
Dow (^DJI): -141.29 (-0.44%) to 31,738.95
Nasdaq (^IXIC): -209.61 (-1.82%) to 11,325.66
Crude (CL=F): -$0.20 (-0.18%) to $110.09 a barrel
Gold (GC=F): +$11.50 (+0.62%) to $1,859.30 per ounce
10-year treasury (^TNX): -4.9 bp for a return of 2.8100%
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8:30 am ET: Abercrombie shares are down after earnings
Abercrombie & Fitch (ANF) shares fell as much as 25% in premarket trading after the company cut its full-year forecast in its latest quarterly report.
For the full year 2022, the company now expects sales growth to fall within a flat range to just 2%, down from a previous forecast of sales growth of 2% to 4% . In cutting its forecast, the company cited “the adverse impact of foreign currency and an assumed inflationary impact on consumer demand.”
After a 4% increase in sales in the first quarter, ANF expects second quarter sales to fall in the “low single digits” compared to the previous year. The company attributed this decline to the impact of the COVID-19-related lockdowns in China, as well as the negative effect that inflation is having on consumer habits.
“Looking ahead, we expect higher costs to continue to be a headwind at least through the end of the year,” CEO Fran Horowitz said. said in the company’s results statement.
“We expect freight to ease in the fourth quarter as the anniversary of increased air usage last year due to the Vietnam shutdown. We will continue to manage expenses rigorously and We are committed to finding opportunities to offset these costs while protecting strategic investments in marketing, technology and our customer experience, which should drive sustained long-term sales growth.”
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7:17 am ET: Futures point to continued losses after Snap cuts forecast
Here’s where stock futures were in premarket trading on Tuesday:
S&P 500 futures (IS=F): -41.00 (-1.03%) to 3,930.75
Dow futures (YM=F): -200.00 (-0.63%) to 31,639.00
Nasdaq futures (NQ=F): -195.50 (-1.62%) to 11,839.75
Crude (CL=F): +$0.41 (+0.37%) to $110.70
Gold (GC=F): +$8.50 (+0.46%) to $1,856.30 per ounce
10-year treasury (^TNX): +7.2 bp for a return of 2.8590%
NEW YORK, NEW YORK – MAY 23: People walk by the New York Stock Exchange (NYSE) on May 23, 2022 in New York City. After a week of heavy losses, markets rose in Monday morning trading. (Photo by Spencer Platt/Getty Images)
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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