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S&P 500 falls, Snap warning pulls technology as Nasdaq loses 2%

The Nasdaq Composite fell on Tuesday as fears of Snap’s bleak warning spread to other tech names, while the Dow Jones Industrial Average moved towards the end from today’s lowest level.

The technology-heavy Nasdaq fell around 2.4% to 11,264.45. The S&P 500 moved 0.8% lower to 3,941.48. Meanwhile, the Dow added 48.4 points, or 0.2%, to 31,928.62. It fell as much as 1.6% earlier in the session.

The blue-chip stock index received a boost from UnitedHealth Group, which jumped 1[ads1].1% before closing time. Dow components McDonald’s, Verizon and IBM all added more than 2%.

The 10-year government interest rate made a sudden move lower as investors who feared a recession penetrated bonds and sent prices higher. The 10-year government interest rate fell as low as around 2.73% on Tuesday after peaking at 3% earlier this year.

Shares in technology companies led today’s losses as investors feared a decline in digital advertising following a warning from social media company Snap. Shares fell 43% after the company said it was preparing to miss out on earnings and revenue targets in the current quarter and warned of a decline in employment. Meta Platforms followed Snap lower and fell 7.6%. Google parent Alphabet fell almost 5% and reached a new low of 52 weeks.

“The biggest culprit is the Snap warning from Monday night,” Adam Crisafulli of Vital Knowledge wrote in a note. “Some people are a little skeptical that a relatively small and eternally unprofitable volatile social media company can take down the whole band, but given how sensitive this band is, SNAP is able to beat the weight.”

“Technology still dominates the market, both numerically (it is still the biggest weighting) and psychologically, and despite aggressive phase-out in the last couple of months, people still own a lot of it,” he added.

Amazon also fell to a new low of 52 weeks, and shares ended the day down 3.2%. Apple fell 1.9 percent.

“We expect all online advertising platforms to feel a certain impact of a significant withdrawal from consumers,” Morgan Stanley analysts wrote after the Snap warning. “Advertising is cyclical.”

The negative reversal on Tuesday came after stocks rose on Monday as the Dow index jumped 618 points, or almost 2%. The S&P 500 rose 1.9% and the Nasdaq Composite rose 1.6%. The short upswing came when the market is stuck in a relentless sale with the Dow down for 8 weeks in a row and the S&P 500 briefly hits the bear market’s territory on Friday.

Billionaire hedge fund manager Bill Ackman said in a series of tweets Tuesday that with inflation going out of control, aggressive Federal Reserve rate hikes are the only way to tame it, and that investors will eventually favor these measures to avoid “economic collapse and demand” “. destruction.”

“If the Fed does not do its job, the market will do the Fed’s job, and that is what is happening now,” Ackman said. “The only way to stop today’s furious inflation is with aggressive monetary tightening or with a collapse in the economy.”

The S&P 500 is 18.2% from the record after falling more than 20% from the highest at some point on Friday. Dow’s losing streak is the longest since 1923.

Together with technology shares, sales have been driven by losses in the retail trade following weak earnings and prospects from Target and Walmart last week. Investors received more bad news from that industry on Tuesday with Abercrombie & Fitch falling 28.6% after reporting that shipping and product costs weighed on sales for the first quarter of the financial year.

The Best Buy share ended the day up 1.2% after the company reported a mixed quarter.

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