NEW YORK, USA – Facebook shares dived nearly 20% early Thursday, July 26, 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%, falling from Wednesday’s record close.
The Dow Jones Industrial Average rose 0.6% to 25,572.77, while the broad-based S&P 500 dipped 0.3% 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.
The dive wiped out some $100 billion – believed to be the worst single-day evaporation of market value for any company.
Investors fled Facebook after the social network reported 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% and Mattel shed 4.4%, while American Airlines climbed 3.7%.
In other developments, computer chip company Qualcomm advanced 4.5% 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%. – Rappler.com