Alphabet shares plunge as earnings miss, US indices dip
Alphabet's Class A stock fell 12.6%, pulling down the S&P 500 and Nasdaq, while Australian markets were set to open higher.
Alphabet reported weaker summer growth than analysts had forecast, sending its Class A shares down 12.6% – the steepest decline since the stock began trading more than two decades ago. The drop contributed to a 0.3% fall in the S&P 500, a 1.4% tumble in the Nasdaq Composite, and a 0.3% decline in the Dow Jones Industrial Average. > "Alphabet said it burned through more cash during the latest quarter, with free cash flow reduced as property and equipment purchases topped $51 billion," the company stated.
Despite the broader market weakness, four out of five S&P 500 components rose, and several firms posted gains, including KLA Corp., Eli Lilly, Mastercard, Merck, DoorDash, and Norwegian Cruise Line Holdings, which all reported earnings above expectations. In the bond market, Treasury yields eased, with the 10-year yield falling to 4.94% after earlier reaching above 5.30% earlier in the month. Brent crude oil prices slipped 0.8% to $110.80 a barrel.
Australian futures indicated a modest rise at the open, with the ASX expected to gain about 0.4% and the local dollar trading slightly lower against the U.S. dollar. In Europe, stock indexes advanced after the European Central Bank kept interest rates unchanged, and its president announced plans to resign in February, nine months before the end of her term.