Snap crash drags Wall Street lower

Dusseldorf A record snap at Snap shocked investors on US stock markets on Tuesday. Snap shares fell nearly 42 percent, falling more than ever. The Nasdaq index fell 3.2 percent to 11,180 points. The Dow Jones index of standard values ​​fell one percent to 31,551 places. The broader S&P 500 lost two percent to 3896 points.

The US group is dependent on advertising revenue. In times of economic uncertainty – like now – customers often become more cautious. The forecast reduction is therefore an indication of the deteriorating economy and the advertising business, wrote analyst Brent Thill from the investment bank Jefferies in an analysis.

Snap’s plunge spread to other ad-dependent tech stocks right after it opened in New York. The short message service Twitter (up to minus 3.9 percent), the photo platform Pinterest (up to minus 28.1 percent), Google’s parent Alphabet (up to minus 8.5 percent) and Facebook’s parent Meta (up to minus 10 .2 percent) lost a total of more than 165 billion dollars in market value, according to calculations by the Bloomberg financial service.

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“Snap’s profit warning published yesterday after the market closed is another psychological damper for the stock market, which at the moment wants and needs to use every straw for a recovery,” commented analyst Joachim Stanzl from broker CMC Market on the development. “With worries of a plummeting advertising business, brief hopes that battered US tech stocks may have bottomed are fading.”

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On Monday, the leading index S&P 500 ended trading on the New York Stock Exchange with a plus of almost two percent. This had fueled hope in the market that after a seven-week streak of losses for investors, the worst was over.

However, three developments are currently exacerbating investors’ concerns about the economy, according to BlackRock’s investment experts. “The even harsher rhetoric from the US Federal Reserve, reports of clouded earnings prospects at major US retailers and weak economic indicators from China.” In the run-up to the publication of the Fed minutes on Wednesday, fluctuations on the stock exchanges are likely to remain high, the analysts said by ActivTrades. “More and more investors and analysts are questioning the Federal Reserve’s current aggressive stance and are awaiting further details.”

Trader Dennis Dick of brokerage Bright Trading said it must be clear that the rate hikes are counteracting high inflation without triggering a recession. “Until then, the market motto is ‘sell before ask,'” said trader Dennis Dick of brokerage Bright Trading.

Individual values ​​in focus:

Petco: Sales and earnings for the last quarter were better than expected. The pet products retailer’s stock is up 3.3 percent.

Abercrombie & Fitch: Abercrombie & Fitch shares plunge 40 percent after the clothing retailer lowered its full-year sales outlook.

Island: The medical device maker is in talks to be acquired by Dexcom, a maker of glucose monitoring systems, according to Bloomberg. Insulet’s stock gains 7.7 percent, Dexcom falls 8 percent.

Nautilus: The shares of the fitness equipment provider slip by around 19 percent. For the current quarter and the 2022/2023 financial year, Nautilus warned of results below market expectations. The industry environment remains difficult, commented analyst Mark Smith from the investment bank Lake Street. The trade is sitting on high inventories that were built up during the pandemic. Nautilus rival Peloton’s titles are down more than six percent.

Commodity Values: A slide in copper prices dragged stocks in the sector lower. Shares in Freeport-McMoRan, the world’s largest publicly traded copper producer, fell 2.9 percent. Southern Copper and Hudbay Minerals slipped as much as 2.6 percent. Concerns about an economic downturn pushed the price of the industrial metal down 1.8 percent to $9,379 a ton.

With material from Reuters.

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