Facebook Sends Nasdaq Tumbling, but Trade Optimism Boosts Dow[embedded content]
NEW YORK — A plunge in Facebook Inc’s shares pushed the Nasdaq down more than 1 percent on Thursday, the index’s biggest one-day drop in a month, but industrial stocks rose after the United States and the European Union said they would negotiate on trade.
Facebook shares dived 19.0 percent, their biggest ever one-day percentage drop, after the social media giant forecast years of lower profit margins. The decline in Facebook shares weighed on the S&P 500 technology index, which dropped 1.6 percent.
Shares of Amazon.com Inc, another member of the so-called FANG group of momentum stocks, fell 3.0 percent and were the second-biggest drag on the Nasdaq and S&P after Facebook. In after-hours trading, they were modestly positive in volatile trading following the company’s quarterly results.
Shares of Twitter Inc, scheduled to report its quarterly results on Friday, slid 2.9 percent.
But while the Nasdaq and the S&P 500 slumped, the Dow rose, in part on the strength of industrial stocks. Industrials, which have been a bellwether of trade tensions, were lifted after U.S. President Donald Trump and European Commission President Jean-Claude Juncker agreed to work to resolve U.S. tariffs on steel and aluminum and Europe’s retaliatory duties.
S&P 500 energy stocks also advanced, ending the session up 1.0 percent, as oil prices rose on the disruption of some of Saudi Arabia’s oil shipments.
“What we’re seeing is the market broadening out, which is healthy,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey. “We need to see a rotation take place when the leadership is under pressure, and the high-flying tech names have been in the leadership position.”