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Tags: social media stocks | online advertising | streaming | inflation | u.s. economy | wall street

Social Media Stocks Set to Weigh on S&P 500, Nasdaq at Open

Social Media Stocks Set to Weigh on S&P 500, Nasdaq at Open
(Dreamstime)

Friday, 22 July 2022 09:23 AM EDT

The S&P 500 and the Nasdaq headed for a lower open on Friday as social media and ad tech firms led declines after dismal quarterly revenues from Twitter and Snap, while an upbeat forecast from American Express looked set to boost the Dow.

Twitter Inc shed 1.8% in premarket trading as it reported a surprise fall in revenue, while Snap's shares plunged 32.4% a day after the Snapchat owner missed revenue targets and declined to make a forecast.

Both companies are facing fierce competition from Apple and TikTok as investors brace for the slowest ever global revenue growth for the social media sector in the second quarter.

Online ad giants Meta Platforms Inc and Alphabet Inc also fell 5.2% and 2.8%, respectively, weighing on Nasdaq futures.

Meta and Alphabet are set to post their earnings next week along with other Big Tech firms including Apple Inc, Microsoft Corp and Amazon.com Inc.

"Meta and Google results are going to be subdued relative to last year, but I also think that these stocks have come down enough that most of this bad news is probably priced in," said Thomas Hayes, managing member at Great Hill Capital.

All three of Wall Street's main indexes are still set to end the week with their biggest gains in almost a month, with growth stocks doing most of the heavy lifting after markets cheered quarterly reports from Tesla Inc and Netflix Inc .

The Dow Jones Industrial Average looked set to open higher as American Express Co jumped 3.9% after it raised its annual revenue forecast.

The U.S. Federal Reserve is expected to raise interest rates by 75 basis points next week to curb runaway inflation, followed by second-quarter U.S. gross domestic product data, which is likely to be negative again.

Two quarters of negative GDP would mean the United States is in a recession.

Red-hot inflation also hit Verizon Communications Inc , which fell 4.2% after cutting its annual adjusted profit forecast.

At 8:41 a.m. ET, Dow e-minis were up 59 points, or 0.18%, S&P 500 e-minis were down 6.25 points, or 0.16%, and Nasdaq 100 e-minis were down 48 points, or 0.38%.

Of the 91 S&P 500 companies that have reporting earnings so far, 78% topped expectations. Analysts now see year-on-year S&P 500 profits to grow 6.3% for the second quarter, down from the 6.8% estimate at the start of the three-month period, according to Refinitiv data.

Seagate Technology Holdings plunged 11% after the memory chip maker announced plans to cut production, hurting shares of rivals Micron Technology and Western Digital.

© 2022 Thomson/Reuters. All rights reserved.


StreetTalk
The S&P 500 and the Nasdaq headed for a lower open on Friday as social media and ad tech firms led declines after dismal quarterly revenues from Twitter and Snap, while an upbeat forecast from American Express looked set to boost the Dow.
social media stocks, online advertising, streaming, inflation, u.s. economy, wall street
427
2022-23-22
Friday, 22 July 2022 09:23 AM
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