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The
owner of photo messaging app Snapchat lost more than a quarter
of its market value in premarket trading after it also posted
its slowest quarterly revenue growth in five years as
advertisers cut spending due to spiraling inflation and
geopolitical woes.
Other companies that rely heavily on ad revenue including
Alphabet Inc, Twitter Inc, Meta Platforms Inc and Pinterest Inc
fell between 1.8% and 7.4%.
"While its (Snap Inc) warning on advertising hit shares in other
social media platform owners like Meta and Pinterest, it could
be that the relevance of Snapchat with a fickle youthful user
base is starting to wane," said Russ Mould, investment director
at AJ Bell.
The slide in mega-cap growth stocks also comes against the
backdrop of the benchmark 10-year U.S. Treasury yield hitting
15-year highs on expectations of continued aggressive rate hikes
by the U.S. Federal Reserve.
Markets are widely expecting a fourth 75-basis-point hike at the
central bank's November meeting.
At 7:04 a.m. ET, Dow e-minis were down 100 points, or 0.33%, S&P
500 e-minis were down 17 points, or 0.46%, and Nasdaq 100
e-minis were down 91.75 points, or 0.83%.
U.S. stocks ended lower on Thursday after comments from
Philadelphia Fed President Patrick Harker added to jitters over
the central bank's rate-hiking spree and its impact on the
economy.
Third-quarter reporting season so far has been
better-than-feared, prompting analysts to nudge their earnings
expectations for S&P 500 companies to a 3.1% increase from 2.8%
earlier in the week, according to Refinitiv data.
It is still well below the 11.1% rise that was forecast at the
start of July.
American Express said its third-quarter profit had modestly
improved, however shares of the company were down 3%.
(Reporting by Shreyashi Sanyal and Ankika Biswas in Bengaluru;
Additional reporting by Medha Singh and Devik Jain; Editing by
Anil D'Silva)
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