US stocks lost ground on Friday, with the technology sector snapping a three-day winning streak with a flourish.
The tech-heavy Nasdaq fell 1.9% on Friday after Snap ( SNAP ) results weighed on the sector and sent shockwaves through the digital ad market.
The benchmark S&P 500 fell 0.9% and the Dow lost 0.4% in the final trading session of the week.
All three major indexes, however, ended the week with modest gains.
The fall of Snap’s (SNAP) disastrous fourth quarter results report weighed on tech stocks to end the week, with the social media company’s shares losing 39% on Friday.
Snap reported revenue slightly short of estimates, but the company’s comments about the overall ad market and its decision not to offer formal guidance spooked investors. The company also said third-quarter revenue growth was holding steady from a year earlier.
In its quarterly letter to shareholders, Snap said in part: “Platform policy changes have changed more than a decade of advertising industry standards, and macroeconomic challenges have disrupted many of the industry segments that have been more critical to the growing demand for our advertising solutions. We’re also seeing increased competition for advertising dollars that are now growing more slowly.”
“Increasing competition” is seen by most observers as a sign that TikTok continues to put pressure on its peers in the social media space.
The co-founder and CEO of Snap Inc. Evan Spiegel holds a Pixy drone as he speaks during the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center in Paris, France June 17, 2022. REUTERS/Benoit Tessier
Metaplatform Actions (TARGET) also fell more than 7% on Friday in sympathy with Snap’s decline. Meta will report its own second-quarter results next Wednesday after the market closes.
Data from Bloomberg demonstrated Snap’s fall took at least $76 billion off the market value of digital ad-related stocks, with shares of Alphabet (GOOG) and Pinterest (PINS) also fall in this news.
Elsewhere on the earnings calendar, shares of Verizon (VZ) lost more than 6% on Friday after the company second quarter results that disappointed
American Express Results (AXP) out Friday morning were positively received by investors, with CEO Stephen Squeri explains to Yahoo Finance he sees no signs of recession when he looks at his business. The company raised your revenue prospects for the entire yearand the stock gained 2% in a down day for the markets.
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AmEx increased loan loss provisions in the second quarter by $410 million, a move we saw big banks make last week as some consumers hunker down amid rising inflation.
Twitter (TWTR) also reported earnings that missed expectations on Friday, with revenue growth missing expectations and the company reporting a loss against expectations for modest earnings per share.
The company said these results reflected “advertising industry headwinds associated with the macro environment, as well as uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk.”
Shares of Twitter rose 1% on Friday.
The euro continued to trade near 1.02 against the dollar, with investors focusing more this week on events on the continent after Thursday’s ECB decision raise interest rates for the first time in 11 years.
Earlier this week, reports on the preparations for energy rationing in the Eurozone over the coming months drew the attention of investors.
Crude oil prices fell again on Friday, falling nearly 2% as WTI crude prices continue to trade below $100 a barrel and US gasoline prices came off the boil. The average price of a gallon of gasoline in the US has now dropped 37 days in a row up to $4.41.
The price of WTI crude oil is down about 20% from its most recent high above $122 reached in early June.
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