Stock Market Today: Dow Rises as Snap Tumbles, Beyond Meat Slumps - Barron's

The S&P 500 capped seven straight sessions of gains Thursday and closed at a new high.

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The stock market was pausing near its record highs Friday even as the tech sector came under pressure as Snap’s Apple issues hit Facebook and other social-media stocks as well.

In midday trading, the Dow Jones Industrial Average was down 30 points, or 0.1%, while the S&P 500 fell 0.4%, and the Nasdaq Composite tumbled 1.1%.

Stocks rallied this week on the back of strong corporate earnings, helping investors shrug off wider concerns that have weighed on markets in the past month—such as inflation, central bank stimulus, and supply-chain disruptions. That’s started to change, a bit, as companies like Honeywell International (ticker: HON) cut guidance over rising costs, Snap (SNAP) tumbles thanks to Apple (AAPL) advertising changes, and Intel (INTC) remains Intel. For now, though, the individual disappointments don’t seem to be viewed as a wider problem.

“Earnings overnight were disappointing with SNAP (down 20%) and INTC (down 3%) posting disappointing results, although they aren’t hitting the market broadly,” wrote the Sevens Reports’ Tom Essaye.

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Bond yields remain elevated, boosted Thursday as the market took note that the labor market looked to be strengthening as positive jobs data showed initial jobless claims last week fell to their Covid-19 pandemic low. The yield on the benchmark 10-year U.S. Treasury note was down slightly from the six-month high of 1.7% reached in the last session. “The global increase in inflation compensation drove nominal yields higher, with the yield on 10yr US Treasuries up +4.4bps yesterday to a 6-month high of 1.70%, as investors are now pricing in an initial hike from the Fed by the time of their July 2022 meeting,” wrote Deutsche Bank’s Jim Reid.

The Fed, whenever it does hike, would be lagging other central banks. Russia’s central bank became the latest to raise interest rates, hiking its key rate by 75 basis points to 7.5%—the sixth rate increase this year—and signaling that more could come in an effort to tame inflation. That makes the U.S. Federal Reserve one of a shrinking number of central bank holdouts yet to tighten monetary policy.

Overseas, Hong Kong’s Hang Seng Index rose 0.4% and the pan-European Stoxx 600 was 0.5% higher. 

Sentiment was buoyed by news that China Evergrande had avoided formal default by making an $83.5 million interest payment on an offshore bond as the 30-day grace period on payment was approaching this weekend. The potential failure of the world’s most indebted property developer—with more than $300 billion in liabilities—remains a threat to the Chinese financial system.

Here are 12 stocks on the move Friday:

Snap plunged 25% after posting disappointing revenue growth and guidance after hours Thursday. The group in part blamed tech giant Apple’s new privacy features for disruptions to its advertising business. Shares in fellow social media companies also fell, with Facebook (FB) 5.7% lower and Twitter (TWTR) falling 4.4%.

Intel was down 11% after the chip maker missed sales expectations when it posted earnings late Thursday, putting down a decline in its PC business to broader component shortages.

Mattel (MAT) rose 1.1% after reporting better-than-expected earnings.

Cleveland-Cliffs (CLF) has risen 9.7% after its earnings beat estimates and the company offered optimistic guidance on steel pricing.

Zoom Video Communications (ZM) advanced 1% after getting upgraded to Overweight from Neutral at JPMorgan.

Beyond Meat (BYND) tumbled 14% after forecasting third-quarter sales of $106 million, below expectations for $133.11 million.

L’Oréal (OR.France) rose 6.1% in Paris, after reporting sales for the third quarter of €8 billion ($9.3 billion), ahead of analyst expectations of €7.7 billion. Sales growth at the personal-care company was driven by strong demand for luxury products, which jumped 20%, amid sustained growth in China.

Vivendi (VIV.France) rose 3.1% in Paris, after the media giant reported sales of €2.5 billion in the third quarter, up 10% from a year ago and ahead of analyst consensus.

The London Stock Exchange Group (LSEG.U.K.) dropped 3.3% in London, after earnings showed revenue rose 2% in the last quarter, and the company said it expects growth to slow in the final quarter of the year.

China Evergrande (3333.HongKong) rose 4.3% in Hong Kong on the back of the bond repayment news.

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Stock Market Today: Dow Rises as Snap Tumbles, Beyond Meat Slumps - Barron's
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