A historic drop for Alphabet's stock dragged the US stock market lower on Thursday.
- The S&P 500 fell 23.59 points, or 0.3%, to 7,720.39 for its first drop in four days. The loss came even though the majority of stocks within the index and across Wall Street rose.
- The Dow Jones Industrial Average fell 132.54 points, or 0.3%, to 52,342.56.
- The Nasdaq composite fell 365.13 points, or 1.4%, to 26,184.72.
Google's parent company was the main reason for the losses, and had its worst drop on record, 12.6%, after
reporting weaker growth for the summer than analysts expected, the
AP reports. The report underscored worries about whether huge investments in AI will pay off. Alphabet said late Wednesday that it burned through more cash during the latest quarter, according to a measure called free cash flow, after its purchases of property and equipment topped $51 billion. The slide wiped around $500 billion from Alphabet's market value, reports the
Wall Street Journal.
If not for Alphabet's drop, the S&P 500 would have been higher for the day. Several companies rallied after reporting stronger profits for the summer than analysts expected, including KLA Corp. The company, whose equipment helps make semiconductors, rose 5.5%. Eli Lilly climbed 6.5%, Mastercard rose 4.1%, and Merck added 3.8%. DoorDash rose 5.6% after saying it agreed to buy Instacart in a deal valuing it at $17 billion. DoorDash also reported stronger profit and revenue for the latest quarter than analysts expected.
- Norwegian Cruise Line Holdings steamed 13.3% higher after likewise topping expectations for summertime profit and revenue. It benefited from cruisers spending more money once aboard ships than the company expected, among other things. Expectations are high for profit growth broadly across US companies. That's what allowed the S&P 500 to set its record earlier this month despite high interest rates and other worries weighing on the stock market.
In the bond market, Treasury yields eased following several mixed reports on the US economy. The overall economy's growth may have accelerated more during the summer than economists expected, thanks to spending by US consumers and businesses investing in AI, according to a preliminary report. But Americans' growth in incomes was weaker in September than economists expected, while a measure of inflation worsened. Fewer US workers applied for unemployment benefits last week, meanwhile, which could indicate fewer layoffs across the country
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