Falling Tech Stocks Pull US Indexes Off Their Record Highs

Close to half of the companies in the S&P 500 have reported their earnings for the latest quarter, and the results have been mostly encouraging. Not only are profits growing, so are revenues for many companies.

But expectations were high coming into the reporting season, and shares rallied accordingly. Now, companies’ stocks are getting less of a boost than usual when they report earnings that are above analysts’ forecasts, said Nate Thooft, senior portfolio manager at Manulife Asset Management.

“And for those few that are disappointing, they’re getting penalized significantly,” Thooft said. Stock prices are dropping more than usual when companies fall short of expectations, he said.

Twitter dropped $2.77, or 14.1 percent, to $16.84. It reported better-than-expected quarterly results, but it also said that its monthly average user base did not grow from the prior quarter.

Health care stocks were also weak, and drugmaker AstraZeneca sank after it said its lung cancer drug Imfinzi did not reach its goals in a clinical trial. U.S.-listed shares of AstraZeneca lost $5.06, or 14.9 percent, to $28.88.

The Dow Minute by Minute

Position of the Dow Jones industrial average at 1-minute intervals on Thursday.

Industrial companies also struggled, and Johnson Controls tumbled $3.18, or 7.3 percent, to $40.14. It reported weaker-than-expected revenue for the latest quarter and trimmed the upper end of the range for its forecast for full-year earnings per share.

On the opposite side were telecom stocks, which rallied for a second straight day. Verizon Communications had its best day in more than eight years after it reported more revenue than analysts expected. Many more customers added wireless phones than Wall Street had forecast. Verizon jumped $3.41, or 7.7 percent, to $47.81.

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