Meta plummets, dragging stocks lower

By Anneken Tappe, CNN Business

Meta ruined things for the stock market on Thursday.

Wall Street was deep in the red as the tech company formerly known as Facebook plummeted following its earnings report. The Nasdaq Composite finished the day down 3.7%. The S&P 500, the broadest measure of the US stock market, fell 2.4%. The Dow fared slightly better, trading down 1.5%. But that was still a nearly 520 point drop.

Late Wednesday, Meta reported a rare drop in profits, driven by spending on its vision for a so-called metaverse while simultaneously confronting advertising challenges on its existing services.

The company’s shares plummeted in after-hours trading and plunged 26% Thursday, making it the worst performer in the S&P 500 and the Nasdaq Composite. It’s the stock’s worst day since it started trading publicly in 2012.

The fall also dragged other tech stocks down, including Amazon, Etsy, Pinterest and Twitter. Amazon is due to report earnings after the close.

Might this be the end of the prominent role the FAANG stocks — Facebook, Apple, Amazon, Netflix and Google — have played in the market? It’s a bit early to call that, and some of those companies are still doing well, TD Ameritrade chief market strategist JJ Kinahan said.

“Apple announced better-than-expected earnings last week and reported very few supply chain issues, even with the microchip shortage that so many other companies have struggled with,” Kinahan said. “While the market may be looking for new leadership to help pull stocks out of their funk, Apple and Alphabet don’t seem to be ready to relinquish their positions any time soon.”

–CNN Business’ Clare Duffy contributed to this report.

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