Stocks falter on Wall Street, Facebook’s parent company collapses

NEW YORK (AP) — Stocks oscillated between gains and losses in choppy trading on Wall Street Thursday as more major companies report earnings.

The S&P 500 fell 0.2% at 12:23 p.m. Eastern. More than 70% of stocks in the benchmark gained ground, but a decline in several large tech stocks with outsized valuations more than offset those gains.

The tech-heavy Nasdaq fell 1.2%. Facebook’s parent company, Meta Platforms, fell 22.3% after reporting a second straight quarter of revenue declines amid falling ad sales and fierce competition from TikTok. It joins other technology and communications stocks, such as Google parent Alphabet and Microsoft, in reporting weak results and worrying forecasts for advertising demand.

The Dow Jones Industrial Average rose 312 points, or 1%, to 32,154. Construction equipment maker Caterpillar rose 8.4% and was a big contributor to the index’s gains after easily beating forecasts. earnings from analysts in the third quarter.

Long-term Treasury yields fell. The 10-year Treasury yield, which influences mortgage rates, fell to 3.94% from 4.01% on Wednesday night. The two-year yield fell to 4.36% from 4.42%.

“What you see is a bit of a relief,” said Megan Horneman, chief investment officer at Verdence Capital Advisors. “The earnings aren’t great, but they aren’t terrible either.”

The benchmark S&P 500 maintains its weekly gains and remains solidly on track to end October in the green.

Earnings were the focus of concern on Wall Street this week, but markets received encouraging economic news on Thursday as the government announced that the US economy returned to growth in the last quarter, growing 2. 6%. This marks a turnaround after the economy contracted in the first half of the year.

The economy has been under pressure from stubbornly high inflation and efforts by the Federal Reserve to raise interest rates to cool prices. The central bank is trying to slow economic growth through rate hikes, but the strategy risks going too far and causing a recession.

Rising interest rates have made borrowing more difficult, especially with mortgage rates. Average long-term U.S. mortgage rates topped 7% for the first time in more than two decades this week.

The latest economic data is being watched closely for any signs of slowing or slowing inflation as Wall Street tries to determine if and when the Fed might reverse its interest rate hikes.

The central bank is expected to raise interest rates by another three-quarters of a percentage point at its next meeting in November. But traders grew more confident of a more modest 0.50 percentage point increase in December, according to CME Group.

Central banks around the world have also raised interest rates in an effort to control inflation. The European Central Bank launched another outsized interest rate hike on Thursday. Markets in Europe were mixed.

Wall Street has more earnings to review later Thursday. Internet retail giant Amazon and iPhone maker Apple report results after the market closes. Exxon Mobil will release its latest financial results on Friday.

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Joe McDonald and Matt Ott contributed to this report.