An unprecedented drop in the stock price of Facebook’s parent firm sent other tech stocks down on Wall Street Thursday, abruptly halting the market’s four-day winning run. The 26.4% fall in Meta Platforms, as Facebook’s owner is now called, wiped more than $230 billion in market value, arguably the worst one-day loss in U.S. history. Other social media firms’ stocks, such as Twitter and Snap, have also fallen.
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Because Meta is so highly valued, a large change in its stock price might influence larger market indices to fall or rise. The S&P 500 plummeted 2.4%, the most in over a year. The Nasdaq composite, which focuses on technology, fell 3.7%, the most since September 2020. The Dow Jones Industrial Average, which excludes Meta Platforms, dropped 1.5%.
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The steep drop weighed on fellow social media company Twitter, which fell 5.6%. Snapchat’s parent company Snap sank 23.6% and Pinterest lost 10.3%. Snap soared 54% and Pinterest vaulted 28% in after-market trading after each reported better-than-expected results. Amazon.com jumped 18% in after-hours trading after reporting strong fourth-quarter results despite supply chain snags.
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The S&P 500 fell 111.94 points to 4,477.44. The Dow dropped 518.17 points to 35,111.16. The Nasdaq slid 538.73 points to 13,878.82. Small-company stocks also fell. The Russell 2000 index lost 38.48 points, or 1.9%, to 1,991.03.
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Some earnings reports did draw a positive reaction Thursday. Wireless carrier T-Mobile rose 10.2% after reporting strong results. Health insurer Humana rose 6.2% and upscale clothing company Ralph Lauren rose 3.5% after also reporting encouraging financial results.
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Wall Street anticipates the Federal Reserve’s first interest rate hike to come in March and is cautiously watching for how the central bank paces future increases to help fight rising inflation.
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Bond yields rose sharply on Thursday. The yield on the 10-year Treasury note, which is used as a benchmark to set interest rates on mortgages and many other kinds of loans, rose to 1.84% from 1.76% late Wednesday.