U.S. stocks lost ground on Friday, with the tech sector snapping a three-day winning streak with a flourish.
The tech-heavy Nasdaq fell 1.9% on Friday after results from Snap (SNAP) weighed on the sector and sent shockwaves through the digital ad market.
The benchmark S&P 500 dropped 0.9% and the Dow lost 0.4% during the week’s final trading session.
All three major indexes, however, finished the week with modest gains.
The fallout from Snap’s (SNAP) disastrous fourth quarter earnings report weighed on tech stocks to finish the week, with shares of the social media company losing 39% on Friday.
Snap reported revenue that was slightly light of estimates, but the company’s commentary on the overall ad market and its decision not to offer formal guidance spooked investors. The company also said third quarter revenue growth was tracking to flat over the prior year.
In its quarterly letter to shareholders, Snap said, in part: “Platform policy changes have upended more than a decade of advertising industry standards, and macroeconomic challenges have disrupted many of the industry segments that have been most critical to the growing demand for our advertising solutions. We are also seeing increasing competition for advertising dollars that are now growing more slowly.”
“Increasing competition” is seen by most observers as a sign that TikTok continues to pressure its peers in the social media space.
Shares of Meta Platforms (META) were also down over 7% on Friday in sympathy with Snap’s decline. Meta will report is own second quarter results next Wednesday after the market close.
Data from Bloomberg showed Snap’s decline took at least $76 billion of market value off digital ad-related stocks, with shares of Alphabet (GOOG) and Pinterest (PINS) also falling on this news.
Elsewhere on the earnings calendar, shares of Verizon (VZ) lost more than 6% on Friday after the company reported second quarter earnings that disappointed.
Results from American Express (AXP) out Friday morning were received positively by investors, with CEO Stephen Squeri telling Yahoo Finance he sees no signs of recession when looking at his business. The company raised its full-year revenue outlook, and shares gained 2% during a down day for the markets.
AmEx did increase provisions for credit losses in Q2 by $410 million, a move we saw big banks make last week as some consumers hunker down amid rising inflation.
Twitter (TWTR) also reported earnings that missed expectations on Friday, with revenue grow missing expectations and the company reporting a loss against expectations for a modest per-share profit.
The company said these results reflected, “advertising industry headwinds associated with the macro environment as well as uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk.”
Shares of Twitter gained 1% on Friday.
The euro continued to trade near 1.02 against the dollar, with investors putting additional focus this week on events on the continent following Thursday’s decision from the ECB to raise interest rates for the first time in 11 years.
Earlier this week, reports regarding preparations for energy rationing in the eurozone over the coming months drew investor attention.
The price of crude oil fell again on Friday, dropping nearly 2% as WTI crude prices continue to trade below $100 a barrel with gasoline prices in the U.S. coming off the boil. The average price of a gallon of gas in the U.S. has now fallen now for 37 straight days to $4.41.
The price of WTI crude oil is down about 20% from its most recent high above $122 reached back in early June.
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