(Reuters) – Alphabet rallied, Apple sank and Twitter tumbled on Thursday after a mixed bag of quarterly reports from top-tier technology companies that investors have relied on this year to power a stock market rally through the coronavirus pandemic.
Share swings following the reports from the tech heavyweights after the bell sent exchange-traded funds tracking the S&P 500 and Nasdaq down about 1% each, suggesting Wall Street may open weaker on Friday.
Mostly upbeat results from Facebook , Google-parent Alphabet and Amazon, along with Microsoft’s strong report earlier this week, show how the largest U.S. companies have expanded their businesses and outperformed smaller rivals this year as the pandemic accelerates trends toward online shopping, video streaming and other technologies.
Alphabet and Facebook both reported strong rises in advertising sales and some caution about the future. Facebook, which often is conservative with forecasts, said that pandemic-related uncertainty could make for a difficult 2021.
Facebook’s stock fell 1%, while Alphabet surged 7%.
“These results are testament to the incredible strength of the Google franchise,” said Nicholas Hyett, an equity analyst at Hargreaves Lansdown. “Where other marketing driven businesses are struggling as advertisers become more cost conscious, it seems some of the cash is in fact finding its way to the internet search giant.”
Apple fell over 5% after its iPhone sales missed estimates, although its quarterly revenue and profit beat analysts’ expectations. That wiped $100 billion from Apple’s stock market value.
Analysts expect aggregate S&P 500 earnings to drop 13% this quarter, compared to an increase of 4.5% in the tech sector, which includes Apple, Microsoft and many other of the index’s largest companies, according to IBES data from Refinitiv.
Twitter reported fewer new users than Wall Street expected, sending its shares 17% lower. If Twitter falls that much in Friday’s trading session it will have been its deepest one-day drop since March, when fear related to the pandemic sent global stock markets into a deep selloff.
Amazon reported a record quarterly profit and forecast a jump in holiday sales, but its shares fell almost 2% after it forecast a jump in costs related to COVID-19.
GRAPHIC: Big Tech’s soaring market value – https://fingfx.thomsonreuters.com/gfx/mkt/oakvenrnapr/Pasted%20image%201603991077530.png
Thursday’s reports come amid turbulence on Wall Street, with soaring coronavirus cases and uncertainty about a fiscal relief bill in Washington dimming the outlook for an economic recovery and knocking over 3% off the S&P 500 so far this week.
Without Facebook, Apple, Amazon, Netflix and Alphabet – the so-called FAANG stocks – the S&P 500 would be down about 4% in 2020, compared with the index’s 2% year-to-date rise, according to a research note from Bespoke Investment Group on Thursday.
“Due to both the huge weight of these stocks and their outperformance, the market has become more reliant on them than ever before for its gains,” according to Bespoke.
(Reporting by Noel Randewich, additional reporting by Munsif Vengattil in Bengalaru; Editing by Lisa Shumaker)
A magnitude 7.5 earthquake jolted Alaska’s southern coast on Monday afternoon, triggering a tsunami warning for The Last Frontier and a short-lived tsunami advisory nearly 2,500 miles away in Hawaii.
The quake struck in the North Pacific Ocean just before 1 p.m., about 67 miles southeast of Sand Point, a town of about 900 people off the Alaskan Peninsula, according to the Alaska Earthquake Center. The tsunami warning was downgraded about two hours later to an advisory that stretched until about 9 p.m. before being canceled.
“It was a pretty good shaker here,” said David Adams, co-manager of Marine View Bed and Breakfast in Sand Point. “You could see the water kind of shaking and shimmering during the quake.”
A magnitude 5.2 quake was reported 11 minutes later in roughly the same area, according to the earthquake center. Wave levels reached 2 feet along Alaska’s southern coast, according to the National Tsunami Warning Center.
About six hours after the first temblor, the tsunami center issued an advisory for the state of Hawaii but stressed that a “major tsunami” was not expected to hit the islands.
The advisory was cancelled about two hours later.
The size of the initial quake was originally reported as a 7.4, but later revised to a 7.5, said Paul Caruso, a geophysicist with the U.S. Geological Survey. He said an earthquake of that size, in this area, is not a surprise.
“This is an area where the Pacific Plate is subducting underneath the North American Plate. And because of that, the Pacific Plate actually goes underneath the North American Plate, where it melts,” Caruso said, noting that’s why there are volcanoes in the region. “And so we commonly have large, magnitude 7 earthquakes in that area.”
The leader of the UK’s six million trade union members is demanding an extension of the coronavirus furlough scheme to prevent “a tsunami of job losses”.
In a direct appeal to Chancellor Rishi Sunak, TUC General Secretary Frances O’Grady says the pandemic won’t end in October, so neither should government support for jobs.
She is pledging to work with Mr Sunak, as unions did in setting up the furlough scheme, to stop “the catastrophe of mass unemployment” and is urging him: “Don’t walk away.”
Ms O’Grady’s plea comes in her keynote speech at a two-day COVID-secure TUC conference in London, with a small invited group in Congress House and union members across Britain joining online.
On day two, Sir Keir Starmer will give his first speech as Labour leader to the TUC Congress, in person at Congress House and followed by a Q&A with Ms O’Grady and frontline workers.
The TUC says its conference this year will focus on the impact of coronavirus and what action is needed to protect jobs and livelihoods in the weeks and months ahead.
Ms O’Grady is also hitting out at claims that the chancellor is poised to scrap the rise in the minimum wage from £8.72 to £9.21 due next April because he can’t afford it after coronavirus.
In her speech, the TUC leader will say: “Unions pushed for the jobs retention scheme. Millions of livelihoods were saved – both employees and the self-employed.
“From this Thursday it will be just 45 days before the JRS ends. That’s the notice period that companies have to give if they intend to make mass redundancies.
“If the government doesn’t act we face a tsunami of job losses. So my message to the chancellor is this:
“We worked together once before. We are ready to work with you again – if you are serious about stopping the catastrophe of mass unemployment. Rishi Sunak: stand by working families – don’t walk away.”
Responding to the TUC leader’s call, a government spokesman said: “Supporting jobs is an absolute priority which is why we’ve set out a comprehensive plan for jobs to protect, create and support jobs across the UK by providing significant, targeted support where it is needed the most.
“We are continuing to support livelihoods and incomes through our £2bn Kickstart scheme, creating incentives for training and apprenticeships, a £1,000 retention bonus for businesses that can bring furloughed employees back to work, and doubling the number of frontline work coaches to help people find work.
“We are also supporting and protecting jobs in the tourism and hospitality sectors through our VAT cut and last month’s Eat Out to Help Out scheme.”
In her speech, Ms O’Grady will talk of a need to keep people in work and highlight a TUC plan to build on the Jobs Retention Scheme, including bringing people back to work on shorter hours.
“The pandemic isn’t scheduled to end in October so neither should state support for jobs,” she will say.
“It’s so much better to keep people working, paying their taxes, spending and helping to rebuild the economy.
“The price of unemployment is always too high. And it’s always paid by ordinary working families. That’s why we are proposing a new job protection and skills deal – a three-way bargain.
“Employers must bring people back, starting on shorter hours. During downtime workers must take part in training and up-skilling.
“And for the time they are not working, the state will subsidise wages, on condition that employers continue to pay at least 80% of the normal rate.”
She will add: “When the crisis began, the chancellor said he would do ‘whatever it takes’. He must keep that promise.
“Some will ask can the country afford to do it? The answer is – we can’t afford not to.”
Demanding the national living wage rise goes ahead as planned, Ms O’Grady will also say: “Coronavirus is no leveller. It has exposed huge inequality in modern Britain.
“Hard work should pay for everyone, no matter who you are or what kind of job you do. Yet many of those who kept this country going through the crisis don’t get the respect they deserve.
“They do valuable, skilled work. But they are short changed.
“The minimum wage – the wage of two million key workers – must rise as planned. Ministers: don’t punch down.
“Key workers have shown courage and dedication. Now it’s time for government and employers to repay that debt by fixing their contracts, raising their pay and giving people dignity at work.”