Wall Street in scattered order, but resists fall in Meta

Wall Street in scattered order, but resists fall in Meta

The facade of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/SPENCER PLATT)

The facade of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/SPENCER PLATT)

The New York Stock Exchange moved in a scattered order on Thursday, but generally resisted the fall of Meta (Facebook), which lost more than 20% after disappointing results.

At around 14:15 GMT, the Dow Jones Industrial Average was up 1.49% and the broader S&P Index was up 0.49%. The Nasdaq index gave it 0.24%.

The Meta, which weighs almost 3% of the Nasdaq index, was in a desperate situation and fell 21.93% to $101.35, after reporting on Wednesday, after the stock market, a new drop in its turnover quarterly (-4%), the second in a row.

The social network is suffering from the slowdown in the advertising market, on which its model depends almost entirely, and competition from other platforms, mainly TikTok.

Stock Meta, formerly Facebook, even briefly dipped below $100 for the first time in more than six years. In one year, it wiped out nearly $600 billion in market capitalization.

However, the Nasdaq, a benchmark for technology stocks, limited its fall.

“Like yesterday (with Alphabet and Microsoft), we have another example of a giant cap undergoing a correction, but the market seems to be handling it quite well,” Briefing’s Patrick O’Hare wrote in a note.com.

“It’s a very positive sign” for the New York market, added Adam Sarhan of 50 Park Investments.

While the Nasdaq as a whole avoided the drop, the tech locomotives took pain, notably Apple (-0.76%) and Amazon (-1.50%), which are due to release their results on Thursday after the stock market. .

On the macroeconomic side, investors welcomed the announcement of growth of 2.6% at an annual rate in the third quarter in the United States, a rate higher than the 2.3% expected by economists.

The world’s largest economy thus returned to growth after two quarters of contraction.

“If we exclude the most volatile categories” from the indicator, “the growth trajectory looks weak,” estimated, however, Jeffrey Roach, an economist at LPL Financial. “A deteriorating housing market, stubborn inflation, and the Federal Reserve’s determination will put the economy on shaky ground in 2023.”

However, according to him, it appears that “markets may have already priced in most long-term recession risks,” which could favor a rebound.

“The news itself doesn’t matter,” Adam Sarhan argued. “What matters is the (traders’) reaction to this news.”

The picture of stronger-than-expected growth could have made investors tense, as it could portend even sharper-than-expected monetary tightening.

“If you have bad news and the market is up, it’s a good sign,” the manager insisted. For him, the Wall Street rally is still a short-term boost, “but we could go higher.”

On the other hand, Twitter rose (+1.17% to $53.97) and approached the price offered by Elon Musk ($54.20), who will complete the takeover of the social network on Friday. The title is at its highest point since the start of the Twitter saga, almost seven months ago.

Tesla (+1.10% to $227.11), of which Elon Musk is the head and main shareholder, also advanced.

McDonald’s (+3.69% to $266.09) rose on the back of better-than-expected results, although revenue fell 5% year over year in the third quarter. The fast food chain is still affected by its departure from Russia. In comparable terms, its sales increased by 9.5% year-on-year.

Construction machinery group Caterpillar jumped (+9.03% to $214.74), driven by sales and net profit well above forecasts. It reported continued strong demand in the third quarter.

Tobacco company Altria rose 0.38% to $46.49 after reporting net profit slightly below expectations. The group from Richmond (Virginia) also unveiled this Wednesday a strategic alliance with the Japanese group JT, very focused on heating tobacco, considered the future alternative to burning tobacco.

Cable operator Comcast (+8.41% to $34.15) benefited from better-than-expected revenues from analysts, although it recorded losses after the massive depreciation of its stake in the British group Sky.

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