Twitter sees biggest 1-day drop since October as user growth disappoints
U.S. stocks retreated from all-time highs Thursday, with the Nasdaq and S&P 500 falling into negative territory as tech stocks gave up early gains inspired by another round of largely upbeat corporate earnings.
The Dow Jones Industrial Average was up 14 points, or 0.1%, at 21,725, as Verizon Communications Inc.(VZ) shares soared 7% and Merck & Co.(MRK) shares rallied 4.2%. Apple Inc. (AAPL) shares weighed on the index with a 2.2% decline. Earlier, the blue-chip average set an intraday record of 21,790.13.
The S&P 500 fell 12 points, or 0.5%, to 2,466, as industrials fell 0.8% and tech stocks dropped 1.6%, after the index touched an intraday record of 2,484.04. Earlier in the session, the tech sector was up as much as 0.6%.
The Nasdaq Composite Index fell 76 points, or 1.2% to 6,346, after touching an intraday record of 6,460.84.
Stocks pulled back in midday trading as gains in tech stocks swung to sharp losses.
"We're still up for the week but these are the points where people take profits," said Mark Kepner, managing director of sales and trading at Themis Trading. Plus, with the pressure coming midsession a toning down of volume can amplify moves, Kepner said.
After being up more than 5% earlier, Facebook Inc.(FB) shares were up 2.9% a day after the social media giant posted results that beat quarterly earnings expectations (http://blogs.marketwatch.com/thetell/2017/07/26/facebook-earnings-put-instagram-in-focus-amid-shift-in-newsfeed-ads-live-blog/). The company could be nearing a $500 billion market cap (http://www.marketwatch.com/story/facebook-heads-toward-500-billion-market-cap-after-earnings-2017-07-26) if shares maintain their strength throughout the session. The stock has already jumped nearly 50% thus far this year.
Facebook is one of the so-called FAANG stocks, a reference to the quintet of technology and internet names (Facebook, Apple, Amazon (AMZN), Netflix (NFLX), and Google parent Alphabet (GOOGL)(GOOGL) that have driven market returns thus far this year. However, those sharp gains have also raised questions over valuations.
"Tech stocks are having to live up to lofty expectations, given the gains they've experienced this year--particularly in the bigger names--and the levels of growth we're seeing are doing just that," said Craig Erlam, senior market analyst at Oanda, in emailed comments.
Read:Next stop for Facebook shares? $200, say analysts applauding results (http://www.marketwatch.com/story/next-stop-for-facebook-shares-200-say-analysts-applauding-results-2017-07-27)
Read:Facebook keeps warning about growth, but growth doesn't stop (http://www.marketwatch.com/story/facebook-keeps-warning-about-growth-but-growth-doesnt-stop-2017-07-26)
Among other corporate results, Procter & Gamble Co.(PG) rose 1% after the Dow component posted a fourth-quarter profit that was above expectations (http://www.marketwatch.com/story/procter-gamble-shares-edge-up-following-q4-earnings-beat-2017-07-27). United Parcel Service Inc. (UPS) also fell 3.9% despite its results topping consensus forecasts (http://www.marketwatch.com/story/ups-shares-rise-as-earnings-beat-estimates-2017-07-27).
MasterCard Inc.(MA) also reported stronger-than-expected earnings (http://www.marketwatch.com/story/mastercard-beats-estimates-as-consumer-spend-more-2017-07-27) and revenue for the second quarter as consumers boosted their spending. Shares were 2.1% lower.
Twitter (TWTR) tumbled 14% after the microblogging platform reported lackluster user growth. The stock is on track for its biggest one-day decline since October.
Comcast Corp.(CMCSA) posted profit and revenue that beat analysts expectations (http://www.marketwatch.com/story/comcast-profit-revenue-beat-analysts-expectations-2017-07-27), and shares rose 1.6%.
PayPal Holdings Inc.(PYPL) shares added 0.4% after the mobile payment group topped earnings views and raised guidance (http://www.marketwatch.com/story/paypal-shares-up-2-after-company-tops-views-raises-guidance-2017-07-26).
After the market close, Amazon.com Inc.(AMZN) is scheduled to report its quarterly results (http://www.marketwatch.com/story/amazon-earnings-with-a-dominant-position-in-the-us-analysts-look-abroad-2017-07-25), along with Expedia Inc. (EXPE), Intel Corp.(INTC), Starbucks Corp.(SBUX) and Mattel Inc.(MAT).
Overseas companies with U.S.-listed shares were also active. AstraZeneca PLC(AZN.LN) (AZN.LN) sank 15% after the drug heavyweight reported a negative result in a Phase 3 clinical trial of its lung-cancer treatment Mystic (http://www.marketwatch.com/story/astrazenecas-mystic-cancer-drug-trial-fails-2017-07-27). (http://www.marketwatch.com/story/astrazenecas-mystic-cancer-drug-trial-fails-2017-07-27) Shares of rival Bristol-Meyer Squibb Co.(BMY) fell 2.9% after its results.
Anheuser-Busch InBev NV(ABI.BT) (ABI.BT) moved 5.5% higher after the brewing giant posted a surge in quarterly profit (http://www.marketwatch.com/story/ab-inbev-profit-up-despite-drop-in-us-market-share-2017-07-27).
(http://www.marketwatch.com/story/ab-inbev-profit-up-despite-drop-in-us-market-share-2017-07-27)And the world's largest liquor maker Diageo PLC(DEO) soared 5.2% after lifting its target for profit margin growth (http://www.marketwatch.com/story/diageo-full-year-earnings-lifted-by-currency-boost-2017-07-27).
Economic data: The number of Americans who applied for first-time unemployment benefits rose in late July but remained near the lowest level in decades (http://www.marketwatch.com/story/us-jobless-claims-climb-10000-to-244000-2017-07-27). Separately, orders for durable or long-lasting U.S. goods soared 6.5% in June (http://www.marketwatch.com/story/boeing-bonanza-durable-goods-orders-soar-65-in-june-2017-07-27).
Other markets: European stocks traded mixed (http://www.marketwatch.com/story/european-stocks-search-for-direction-in-busy-session-for-earnings-2017-07-27) as investors absorbed a heavy stream of earnings, while in Asia , equity markets were broadly positive (http://www.marketwatch.com/story/asia-stocks-broadly-positive-nikkei-lifted-by-nintendo-2017-07-27).
Gold prices rose 0.9%, with precious and base metals rising across the board.
The ICE Dollar Index rose following an earlier decline, and was last trading up 0.3% at 93.92. The dollar weakened on Wednesday, after some analysts viewed the Federal Reserve as striking a dovish tone in its policy statement (http://www.marketwatch.com/story/fed-to-wind-down-bond-holdings-relatively-soon-2017-07-26).
--Barbara Kollmeyer in Madrid contributed to this report.
(END) Dow Jones Newswires
July 27, 2017 13:51 ET (17:51 GMT)