Nasdaq, S&P 500 End Lower, Dragged Down by Communications Services

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The S&P 500 and Nasdaq closed little connected Friday arsenic disappointing quarterly reports from Snap Inc. and Intel Corp. enactment unit connected the communications and exertion sectors and investors turned skittish arsenic Federal Reserve Chair Jerome Powell discussed stimulus tapering.

The Dow managed to extremity the time with a grounds closing precocious for the archetypal clip since Aug. 16, but each 3 indexes had mislaid crushed successful greeting trading portion Powell was speaking but went connected to pare losses successful a choppy session.

Powell said the U.S. cardinal slope was “on track” to statesman reducing its purchases of assets.

Sean Sun, portfolio manager astatine Thornburg Investment Management successful Santa Fe, New Mexico said Powell “didn’t look incrementally much hawkish.”

But Sun said investors were “really anxious” astir weaker than expected net astatine Snap, which attributed immoderate weakness successful its advertizing concern to planetary supply-chain disruptions and labour shortages that caused brands to propulsion backmost connected their advertizing spending.

Snap shares fell much than 25 percent and its study caused shareholders to exit bigger advertizing babelike communications companies specified arsenic Facebook Inc. and Twitter Inc., which some closed down astir 5 percent.

As a effect the S&P’s communications services scale was the biggest resistance connected the benchmark index.

“Consumers privation to unfastened their wallets and bargain things but they can’t if goods are stuck connected instrumentality ships. And advertisers aren’t going to advertise things they can’t sell,” said Sun, noting that maturation stocks were down successful sympathy.

“Investors are present reasoning astir hazard reward and valuations successful maturation stocks permission little country for disappointment.”

Intel shares tumbled astir 12 percent aft the machine spot shaper missed third-quarter income expectations, portion its main enforcement serviceman pointed to shortages of chips holding backmost income of its flagship processors.

The Dow Jones Industrial Average roseate 73.94 points, oregon 0.21 percent, to 35,677.02, the S&P 500 mislaid 4.88 points, oregon 0.11 percent, to 4,544.9 and the Nasdaq Composite dropped 125.50 points, oregon 0.82 percent, to 15,090.20.

Still, each 3 indexes notched a 3rd consecutive week of gains for the archetypal clip since aboriginal July, with the S&P adding 1.6 percent for the week portion the Dow climbed 1.1 percent and the Nasdaq precocious by 1.3 percent.

Among the S&P’s large sectors connected Friday, user discretionary was a resistance arsenic Amazon.com Inc. fell and Intel helped propulsion down the high-profile exertion index.

The fiscal assemblage was helped, however, by beardown gains successful American Express Co., which roseate 5.4 percent aft it bushed nett estimates for the 4th consecutive quarter.

Analysts accrued their expectations for S&P 500 net maturation for the 3rd quarter, forecasting an summation of 34.8 percent year-on-year, up from an expected 31.9 percent emergence astatine the opening of the week, according to information from Refinitiv.

But immoderate investors were already looking beyond the awesome net numbers, according to Brad McMillan, main concern serviceman for Commonwealth Financial Network, an autarkic broker-dealer successful Waltham, Massachusetts.

“The existent question astir whether we tin propulsion higher is going to beryllium whether system is going to get better, due to the fact that the net are backwards-looking,” McMillan said.

Data showed U.S. concern enactment accelerated successful October, arsenic COVID-19 infections subsided, though labour and earthy worldly shortages held backmost manufacturing.

Advancing issues outnumbered declining ones connected the NYSE by a 1.08-to-1 ratio; connected Nasdaq, a 1.30-to-1 ratio favored decliners.

The S&P 500 posted 88 caller 52-week highs and nary caller lows; the Nasdaq Composite recorded 142 caller highs and 137 caller lows.

On U.S. exchanges 11.03 cardinal shares changed hands compared with the 10.38 cardinal moving mean for the past 20 seconds.

By Shreyashi Sanyal, Devik Jain, and Sinéad Carew

Reuters

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