Opera Limited Chairman & CEO Yahui Zhou, third left, with secretary to the board An Da, left, and Shu Guan Wang, from China International Capital Corp., watch price quotes before Opera's IPO begins trading, at the Nasdaq MarketSite, in New York's Times Square, Friday, July 27, 2018. (AP Photo/Richard Drew)

Technology companies weighing again on US stocks; Oil falls

July 27, 2018 - 3:21 pm

Technology companies led a broad slide in U.S. stocks Friday, adding to the market's losses from a day earlier. Twitter led the technology sector sell-off after the social media network said its monthly users declined in the second quarter. Smaller-company stocks fell more than the rest of the market. The losses outweighed gains in banks and phone companies. Investors remained focused on the latest string of company earnings reports, which have been mostly positive.

KEEPING SCORE: The S&P 500 index fell 20 points, or 0.7 percent, to 2,816 as of 3:05 p.m. Eastern Time. The Dow Jones Industrial Average slid 80 points, or 0.3 percent, to 25,446. The Nasdaq composite index, which is heavily weighted with technology companies, lost 121 points, or 1.6 percent, to 7,730. The Russell 2000 index of smaller-company stocks gave up 31 points, or 1.9 percent, to 1,663.

Despite the sell-off, the S&P 500, the market's benchmark index, is still on track for its fourth weekly gain in a row.

THE QUOTE: "There were clearly high expectations coming into second-quarter earnings and we've seen where companies have performed well relative to those expectations, they've typically been rewarded, and where they have fallen short of those expectations, either in current quarter or future guidance, is where you're seeing (selling) occur," said Bill Northey, senior vice president at U.S. Bank Wealth Management.

SOCIAL MEDIA WOES: For the second straight day a social media company led a steep decline in technology companies, cutting into some of the market's gains. Twitter plummeted 18.6 percent to $34.94 after the company reported disappointing user totals and its forecast disappointed investors. Snap, the company behind the Snapchat messaging app, slid 4.6 percent to $12.76. Facebook shares gave up 1.5 percent to $173.61 a day after the social media giant led a slide in technology stocks that snapped the S&P 500's three-day winning streak. Facebook's steep drop, which erased nearly $120 billion of the company's market value, was brought on by its warning to investors that it sees slower revenue growth ahead. With Friday's losses, Facebook shares are now on track to finish in a bear market, which is defined as a drop of 20 percent from a recent peak.

NOT SO CHIPPER: Intel skidded 8.7 percent to $47.62 after the chipmaker's latest quarterly report left analysts concerned about the company's profit margins and key businesses.

CTRL+ALT+DEL: Computer hard drive companies contributed to the technology sector losses. Western Digital lost 7.7 percent to $71.16, while Seagate Technology slid 4.3 percent to $55.07.

PAIN AT THE PUMP: Exxon Mobil slid 3.2 percent to $81.55 after the oil company's quarterly profit fell far short of Wall Street estimates.

GOOD TRIP: Expedia Group surged 8.4 percent to $136.33 after the online travel portal's quarterly earnings topped analysts' forecasts.

TASTY RESULTS: Chipotle Mexican Grill climbed 5.6 percent to $471.98 after the restaurant chain said sales online and at established stores improved in its latest quarter.

DELIVERING THE GOODS: Amazon.com rose 0.5 percent to $1,816.80 after the online retailer reported its biggest profit ever as its advertising and cloud computing businesses kept growing.

BANK ON IT: Investors bid up bank shares, adding to the financial sector's gains this year. Jefferies Financial climbed 6 percent to $24.46.

OIL: Benchmark U.S. crude lost 92 cents, or 1.3 percent, to settle at $68.69 per barrel in New York. Brent crude, used to price international oils, fell 25 cents to close at $74.29.

BOND YIELDS: Bond prices rose, sending yields lower. The yield on the 10-year Treasury fell to 2.96 percent from 2.97 percent late Thursday.

CURRENCIES: The dollar slipped to 110.99 yen from 111.23 yen on Thursday. The euro strengthened to $1.1658 from $1.1645.

METALS: Gold lost $2.70 to $1,223 an ounce. Silver was little changed at $15.49 an ounce. Copper fell 2 cents to $2.80 a pound.

STRONGER GROWTH: The U.S. economy surged in the April-June quarter to an annual growth rate of 4.1 percent. That's the fastest pace since 2014, driven by consumers who began spending their tax cuts and exporters who rushed to get their products delivered ahead of retaliatory tariffs.

MARKETS OVERSEAS: Major indexes in Europe rose. Germany's DAX added 0.4 percent and the CAC 40 in France gained 0.6 percent. Britain's FTSE 100 picked up 0.5 percent. In Asia, Japan's Nikkei 225 index rose 0.6 percent. The Kospi in South Korea picked up 0.3 percent. Hong Kong's Hang Seng index edged 0.1 percent lower.

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