U.S. stocks ended sharply lower on Thursday, snapping a four-day winning streak, as disappointing earnings news and weak revenue guidance from Facebook parent Meta triggered widespread selling.
The major averages all ended with sharp losses. The Dow ended down by 518.17 points or about 1.45 percent at 35,111.16, not far off from the session’s low of 35,071.06. The S&P 500 declined 111.95 points or 2.44 percent to 4,477.43, while the tech-laden Nasdaq settled at 13,878.82, posting a loss of 538.73 points or 3.74 percent.
A steep drop by Meta (FB) weighed on the tech sector, with the Facebook parent plunging nearly 27 percent, and hitting its lowest intraday level in well over a year.
Meta reeled under pressure after the social media giant reported weaker than expected fourth quarter earnings and provided disappointing revenue guidance for the current quarter.
Several other social media stocks, including Snap and Twitter, tumbled as well.
Not so encouraging earnings updates from several other companies, including Honeywell (down more than 7 percent) and Spotify (down nearly 17 percent), also weighed on sentiment.
Spotify reported a narrower than expected fourth quarter loss but issued a weaker than expected subscriber forecast.
Microsoft, Amazon, Salesforce.com, Merck, Intel, Home Depot, Caterpillar, Amgen, Walt Disney, Nike, Apple Inc and Cisco Systems also ended sharply lower.
the Labor Department released a report showing a modest decrease by first-time claims for U.S. unemployment benefits in the week ended January 29th.
The report showed initial jobless claims dipped to 238,000, a decrease of 23,000 from the previous week’s revised level of 261,000.
Economists had expected jobless claims to edge down to 245,000 from the 260,000 originally reported for the previous week.
Meanwhile, the Institute for Supply Management released a separate report showing a continued slowdown in the pace of growth in U.S. service sector activity in the month of January.
The ISM said its services PMI dipped to 59.9 in January after slumping to 62.3 in December, although a reading above 50 still indicates growth. Economists had expected the index to drop to 59.5.
With the relatively modest decrease, the services PMI continued to give back ground after reaching a record high of 68.4 in November.
A report from the Commerce Department showed factory orders fell by 0.4 percent in December after surging by an upwardly revised 1.8 percent in November. Economists had expected factory orders to dip by 0.2 percent compared to the 1.6 percent jump originally reported for the previous month.
Investors also looked ahead to the Labor Department’s closely watched monthly jobs report, due on Friday.
Economists currently expect employment to rise by 150,000 jobs in January after climbing by 199,000 jobs in December. The unemployment rate is expected to hold at 3.9 percent.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday, with the Chinese and Hong Kong markets still closed for Lunar New Year. Japan’s Nikkei 225 Index slumped by 1.1 percent, while South Korea’s Kospi surged up by 1.7 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the U.K.’s FTSE 100 declined 0.71 percent, Germany’s DAX and France’s CAC 40 shed 1.57 percent and 1.54 percent, respectively. Switzerland’s SMI drifted down 1.02 percent, while the pan European Stoxx 600 shed 1.76 percent.
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