NEW YORK : Investors are homing in on a flood of earnings reports from Wall Street’s tech and Internet giants, as the high-growth stocks that have led markets higher for years face pressures from regulation, supply-chain snags and rising Treasury yields.
Strong earnings reports have helped lift the S&P 500 to fresh record highs, with the benchmark index rising 5.5per cent so far in October. In September, the index posted its biggest monthly percentage drop since the pandemic began in March 2020. Meanwhile, shares of Facebook fell 5per cent on Friday after Snap Inc, the owner of photo messaging app Snapchat, said privacy changes implemented by Apple on iOS devices hurt its ability to target and measure its digital advertising.
The market's gains this month have been led by sectors seen as particularly sensitive to swings in the economy, including energy and financials, which have gained 11per cent and 8per cent, respectively. The S&P 500 technology sector is up 6per cent month-to-date. A BofA Global Research survey showed earlier this month that fund managers are slightly underweight technology relative to their average positioning of the past 20 years. At the same time, they named “long tech” as the market’s most crowded trade for the fourth straight month.
The prospect of U.S. government regulatory intervention, also hangs over these behemoth companies, so investors will be keen for any insight.
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