Facebook Shares Dive on Weak Outlook, Weighing on Nasdaq
Facebook shares dived nearly 20 percent early Thursday after it signaled it expects weaker growth, pushing the Nasdaq decisively lower.
About 25 minutes into trading, the tech-rich Nasdaq Composite Index was at 7,840.20, down 1.2 percent, falling from Wednesday’s record close.
The Dow Jones Industrial Average rose 0.6 percent to 25,572.77, while the broad-based S&P 500 dipped 0.3 percent to 2,838.03.
The Facebook results shifted the market’s attention from Wednesday’s pledge by President Donald Trump and European Commission chief Jean-Claude Juncker on trade that had boosted markets.
Investors fled Facebook after the social network reportedly sharply higher profit and revenue, but signaled it expects slower user growth, partly due to the effect of data privacy scandals.
Facebook chief executive Mark Zuckerberg also cautioned that profitability would be hit by additional spending to secure the network.
Other technology companies retreated, including Google parent Alphabet, Netflix and Amazon, which is scheduled to report results after the market closes Thursday.
Facebook was not the only company to fall after results. Ford sank 4.1 percent and Mattel shed 4.4 percent, while American Airlines climbed 3.7 percent.
In other developments, computer chip company Qualcomm advanced 4.5 percent as it dropped a $43 billion bid to acquire Dutch rival NXP on Thursday after failing to win approval from antitrust authorities in China.
US shares of NXP fell 5.6 percent.
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