Social media

US STOCKS-Social media stocks set to weigh on S&P 500, Nasdaq at open

Band Shreyashi Sanyal

July 22 (Reuters)The S&P 500 and Nasdaq headed for a lower open on Friday as social media and ad tech companies led declines after dismal quarterly earnings from Twitter and Snap, while an upbeat forecast from American Express looked set to boost the Dow Jones.

Twitter Inc. TWTR.N fell 1.8% in premarket trading as it reported a surprise drop in revenue, while Snap shares SNAP.N plunged 32.4% a day after the Snapchat owner missed revenue targets and declined to make a forecast.

Both companies face fierce competition from Apple AAPL.O and TikTok as investors brace for the slowest-ever global revenue growth for the social media industry in the second quarter.

Online advertising giants Meta Platforms Inc META.O and Alphabet Inc. GOOGL.O also fell 5.2% and 2.8%, respectively, weighing on Nasdaq futures NQcv1.

Meta and Alphabet are expected to report earnings next week along with other big tech companies including Apple Inc. AAPL.OMicrosoft Corporation MSFT.O and Amazon.com Inc. AMZN.O.

“Meta and Google results are going to be subdued compared to last year, but I also think these stocks are down enough that most of this bad news is likely to be factored in,” said Thomas Hayes, member. director of Great Hill Capital.

Wall Street’s three major indexes are still expected to end the week with their biggest gains in nearly a month, with growth stocks doing most of the heavy lifting after markets cheered quarterly reports from Tesla Inc. TSLA.O and Netflix Inc. NFLX.O.

The Dow Jones Industrial Average .DJI looked set to open higher as American Express Co AXP.N jumped 3.9% after raising its annual revenue forecast.

The US Federal Reserve is expected to raise interest rates by 75 basis points next week to rein in runaway inflation, followed by second quarter US gross domestic product data, which is again expected to be negative.

Two quarters of negative GDP would mean the United States is in recession.

Searing inflation also hit Verizon Communications Inc VZ.Nwhich fell 4.2% after it cut its adjusted annual earnings forecast.

To 8:41 am ET, Dow e-minis 1YMcv1were up 59 points, or 0.18%e-mini S&P 500 ESCv1were down 6.25 points, or 0.16%and Nasdaq 100 e-minis NQcv1were down 48 points, or 0.38%.

Of the 91 S&P 500 companies that have reported earnings so far, 78% have exceeded expectations. Analysts now expect S&P 500 year-over-year earnings to rise 6.3% in the second quarter, down from the 6.8% estimate at the start of the three-month period, according to Refinitiv data. .

Seagate Technology Holdings STX.O plunged 11% after memory chip maker announced plans to cut production, hurting shares of rivals Micron Technology MU.O and western digital WDC.O.

(Reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Shounak Dasgupta and Saumyadeb Chakrabarty)

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