Oct 29 (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
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.
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
"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)