Technology shares fell on Tuesday, with investors abandoning shares of companies that have gained in price during the pandemic.
Social media company
Snap Of Inc.
SNAP -43.10%
the stock lost 42% to $13.15, in line with the largest percentage drop on record. The company give profit warning Monday and said it plans to slow hiring and spending.
Other tech stocks rely on digital ad spend also decreased. Google’s Parents
GOOG -5.23%
slip 5.5%, while
Facebook -7.35%
down 8.4%. Video streaming company
ROKU -13.38%
recently dropped 16%, while
TWTR -5.31%
last month agree to be sold arrive
TSLA -6.63%
Managing director
Elon Musktrading 4.3% lower.
Nasdaq Composite focuses on technology down 2.7%, after it ended on Monday, up 1.6%. The Nasdaq, down 28% so far this year, has been hit harder than the other major US indexes and is picking up steam in its worst first 100 trading days of the year on record. Compared to the broad S&P 500, down 18%.
Bets on tech stocks cleared up this year, sanctioned by the Federal Reserve plan to raise interest rates to tame inflation at its highest level in four decades. The broader market has also shrunk due to Geopolitical chaosinflationary pressures and recession worldwide.
Robert Stimpson, chief investment officer at Oak Associates, said: “Snap’s drop is confirmation that the market is less likely to accept long-term, higher-growth companies with high profitability. more volatile returns in a risk-averse environment”. Mr. Stimpson’s company currently favors large-cap, blue-chip companies over volatile tech stocks.
Snap warnings may signal that Ad spend has peakedanalysts said.
“This tends to be one of the first areas businesses cut back as they go,” said Fiona Cincotta, senior financial markets analyst at UK-based commercial services firm City Index. start cutting back when times get tough. “The fact that we’re seeing that is really remarkable because the situation is deteriorating so quickly for businesses and for the broader economy.”
Going against the trend Tuesday is another pandemic winner: the video conferencing company
Zoom Video Communications Inc.
ZM 6.67%
up 6.3% after raise its profit prospects while reporting the slowest growth rate on record.
BBY 1.61%
shares fell 0.2% after the consumer electronics retailer reported revenue and profit decline for the most recent quarter. The company said its results for the current fiscal year will be worse than previously predicted amid increased promotions and higher supply chain costs.
Write to Hardika Singh at [email protected]
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