A plunge in Facebook Inc.’s shares pushed the Nasdaq down more than 1 per cent on Thursday, the index’s biggest one-day drop in a month, but industrial stocks rose after the United States and the European Union said they would negotiate on trade.
The Dow Jones Industrial Average rose 114.39 points, or 0.45 per cent, to 25,528.49, the S&P 500 lost 8.6 points, or 0.30 per cent, to 2,837.47, and the Nasdaq Composite dropped 80.05 points, or 1.01 per cent, to 7,852.19.
Facebook Inc. shares dived nearly 20 per cent, its biggest ever one-day percentage drop, after the social media giant forecast years of lower profit margins. The company posted the largest one-day loss in market value by any company in U.S. stock market history. It lost US$119-billion in market cap. The decline in Facebook shares weighed on the S&P 500 technology index , which dropped 1.7 per cent.
Shares of Amazon.com Inc, another member of the so-called FANG group of momentum stocks, fell nearly 3 per cent. Amazon, which is scheduled to report quarterly results after the bell on Thursday, was the second-biggest drag on the Nasdaq and S&P after Facebook.
Shares of Twitter Inc, scheduled to report its quarterly results on Friday, slid 3.1 per cent.
But while the Nasdaq and the S&P 500 slumped, the Dow rose, in part on the strength of industrial stocks. Industrials, which have been a bellwether of trade tensions, were lifted after U.S. President Donald Trump and the European Commission President Jean-Claude Juncker agreed to work to resolve U.S. tariffs on steel and aluminum and Europe’s retaliatory duties.
The Dow Jones Industrial Average rose 121.25 points, or 0.48 percent, to 25,535.35, the S&P 500 lost 8.7 points, or 0.31 percent, to 2,837.37 and the Nasdaq Composite dropped 82.45 points, or 1.04 percent, to 7,849.79.
“Yesterday, there was a divergence between the Dow and the Nasdaq, and you’re continuing to see that today,” said Shawn Cruz, manager of trader strategy at TD Ameritrade in Chicago. “Facebook is such a big component of the Nasdaq. A sudden reversal can have a chilling effect.”
In Toronto, the S&P/TSX Composite Index unofficially closed up 34.97 points, or 0.21 per cent, at 16,455.73., led higher by the energy sector, which was up 1 per cent.
Mullen Group gained nearly 7 per cent after its latest earnings report beat expectations and it boosted its capital spending budget by $20-million. Suncor gained 2.5 per cent following a quarterly profit beat on Wednesday.
Oil prices rose for the third consecutive day on Thursday after Saudi Arabia suspended oil shipments through a strait in the Red Sea after an attack on two oil tankers and as trade tensions between the United States and the European Union eased.
Brent futures rose 60 cents to US$74.53 a barrel. The contract earlier touched US$74.83 a barrel, highest since July 16. U.S. West Texas Intermediate (WTI) crude futures were up 53 cents at US$69.83.
Industrials were up 0.8 per cent as Air Canada rose 4.8 per cent, a day after it and a group of investors announced plans to buy Aimia Inc.'s Aeroplan program. Bombardier gained 1 per cent after getting a big order for subway cars for Signapore.
Facebook’s reckoning hit Canada’s tech sector, which was off 0.5 per cent. Shopify fell 1.7 per cent, Celestica was off 1.4 per cent and Constellation Software, which recently cancelled its quarterly earning conference call, was down 1.2 per cent.
The materials sector, down 0.5 per cent, weighed on the TSX. The top drag to the gold sector was Barrick Gold, which fell 6 per cent after the company missed estimates for quarterly profit on Wednesday.
A 6-per-cent decline in shares of Goldcorp and an 18 per cent drop in New Gold following disappointing quarterly results also weighed on the materials group.
Gold edged lower in response to an easing of trade tensions after the United States agreed to refrain from imposing tariffs on cars from the European Union. Spot gold dropped 0.4 per cent to US$1,225.89 an ounce.
Lundin Mining Corp. launched a hostile $1.4-billion takeover bid for fellow Canadian miner Nevsun Resources Ltd. on Thursday, saying it had failed to convince Nevsun’s board to strike a friendly deal over the past nine months. Lundin’s stock fell 1.8 per cent while Nevsun gained 1.7 per cent.
Big percentage gainers on the TSX were NexGen Energy Ltd., which jumped 9.2 per cent after the company posted a higher profit and Cameco Corp., which rose 4.7 per cent after a brokerage upgraded its rating following quarterly results.
In the U.S., another drag on the S&P and Nasdaq was Biogen Inc, whose shares tumbled 11.2 per cent as trial data from its Alzheimer’s drug failed to impress investors.
McDonald’s Corp shares dipped 1.8 per cent after the fast-food chain missed U.S. same-store sales estimates for the first time in at least two years.
Chipmakers, however, were a bright spot amid Thursday’s declines. The Philadelphia SE Semiconductor Index rose 1.7 per cent.
Shares of Advanced Micro Devices Inc jumped 14.3 perc ent and Xilinx Inc shares climbed 10.1 per cent after both companies reported robust quarterly results.
Shares of Qualcomm Inc gained 6.9 per cent after the chipmaker pulled its US$44-billion bid for NXP Semiconductors NV upon failing to win Chinese regulatory approval. NXP shares dropped 5.7 per cent.
Supervalu Inc. shares surged 65.3 percent after United Natural Foods Inc agreed to buy the supermarket operator in a US$2.9-billion deal. United Natural Foods shares sank 16.7 per cent, however.
With files from Reuters