Yahoo Finance S&P 500 Closes Below Record High as Tech Crackles Under Snap Pressure
By Yasin Ebrahim
Investing.com – The S&P 500 retreated from all-time highs to close lower Friday, as a slump in Snap triggered a sea of red in tech just as Federal Reserve Chairman Jerome Powell attempted to quell concerns about the prospect of earlier rate hikes.
The S&P 500 closed down 0.1% at 4,544.98 just shy of its closing record of 4,549.78, the Dow Jones Industrial Average added 0.2%, or 74 points, the Nasdaq Composite slipped 0.82%.
"It is time to taper, not to raise rates," Powell said. The remarks arrived against the backdrop of growing concerns the Fed may be forced to hike rates sooner rather than later to curb inflation pressures.
The Fed chief continued to suggest the pace of inflation remains transitory, though said the central bank would use its tools to “guide inflation back down to 2% over time.”
“At the same time, we think we can be patient and allow the recovery to take place and allow the labor market to heal,” he added.
Tech, which has played a big role in the recent market melt-up, was under pressure after Snap’s warning on slowing revenue growth following Apple’s privacy-related changes to its mobile operating system, iOS.
Apple (NASDAQ:AAPL) announced earlier this year that, as part of the iOS 14 update, it will give users the option to block apps from accessing the IDFA, or tracking advertiser on their iPhones.
Snap (NYSE:SNAP) also blamed supply chain headwinds as another factor for the below-consensus 4Q21 guidance.
But both supply issues and events “should ultimately prove transitory as advertisers progressively adopt new tools to more accurately measure events in a post-IDFA world and also as issues such as port congestion and labor shortages revert back to pre-pandemic levels,” Credit Suisse (SIX:CSGN) CSGN said in a note.
Facebook (NASDAQ:FB), Twitter (NYSE:TWTR), and Pinterest (NYSE:PINS) were down more than 4%.
Financials, meanwhile, were pushed higher by better-than-expected quarterly results from regional banking stocks and American Express .
SVB Financial Group (NASDAQ:SIVB) raised its full year 2021 growth outlook following third-quarter results that beat on both top and bottom lines, sending its share more than 6% higher.
“This is the strongest preliminary guide the company has introduced in many years […],” Wedbush said as it raised its price target on the stock to $800.00 from $775.00.
“Highlights include average loan growth in the mid 20s percentage range, net interest income in the mid 30s percentage range (we had previously assumed 24%), core fee income in the mid 20s percentage range…” it added.
American Express (NYSE:AXP) closed about 5% higher after the credit card reported that third quarter earnings and revenue that exceeded Wall Street estimates, and guided 2022 earnings per share within the top of its guidance range.
In China, meanwhile, real estate property Evergrande looks set to avert default after reportedly meeting a key debt payment before a default deadline.
In other news, Digital World Acquisition Corp (NASDAQ:DWAC) more than doubled adding to its 357% climb Thursday ahead of a widely expected SPAC’s merger with former President Donald Trump’s planned social media platform.
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