Video Game Companies Lead Modest Slide in US Stocks
A mixed bag of corporate earnings pulled stocks modestly lower in late-afternoon trading, placing the market on track to snap a five-day winning streak and more in Wednesday’s Stock Market Update.
Video game makers were the biggest losers. Take-Two Interactive and Electronic Arts plunged after releasing weak forecasts, citing tougher competition. A broad slide in homebuilder shares also weighed on the market.
Gains in technology stocks offset some of those losses, with Skyworks Solutions leading the way. Shares in the semiconductor company jumped after it announced a $2 billion stock buyback plan.
Snap, which operates the photo-messaging app Snapchat, soared after reporting a giant increase in sales and slashing its quarterly loss in half.
The mixed results continue rolling out, with more than half of the companies in the S&P 500 having already reported earnings. The results are mostly beating forecasts, helping to allay some investors’ fears over a slowdown in growth.
Broader economic concerns continue shadowing the market, however. Investors are still concerned about tariffs cutting into profits and consumers’ wallets, along with a general slowdown in growth globally.
STOCK MARKET UPDATE
KEEPING SCORE: The Dow Jones Industrial Average fell 19 points to 25,392 at closing time. The benchmark S&P 500 index slipped 6 points to 2,731 percent. The Nasdaq composite slid 26 points to 7,375.
THE QUOTE: “We’ve been on a nice five-day positive streak here, perhaps we’ll still see something to pull that out, but this may be the day that we break that stretch here,” said Paul Springmeyer, head of investments at U.S. Bank Wealth Management.
FORTNITE FIGHT: Take-Two and Electronic Arts plunged 14.3 percent and 12.5 percent, respectively, as the companies grapple with competition from Epic Games Inc.’s hit game “Fortnite.”
Take-Two, maker of the “Grand Theft Auto” and “Red Dead Redemption” games series, gave investors a weak outlook for the current quarter. Electronic Arts’ titles include “The Sims” and various sports games, including “Madden NFL.”
Activision Blizzard, maker of the “Call of Duty” and “Candy Crush” games, fell 10.6 percent.
NOT CONSTRUCTIVE: Homebuilders were broadly lower, adding to the market’s downward shift. LGI Homes led the pack with a 5.7 percent decline.
OH, SNAP: The company behind the popular photo-messaging app SnapChat surged 23.6 percent as advertising gains drove revenue growth in the fourth quarter. The revenue increase helped cut the company’s losses. It also maintained its user base.
FIT TO PRINT: The New York Times vaulted 11.4 percent in heavy trading after the newspaper publisher touted a big gain in digital subscribers and digital revenue for the October-December quarter. The Times added 265,000 digital subscriptions in the fourth quarter. Its earnings and revenue topped Wall Street’s forecasts.
FANCY SHOES: The company behind Michael Kors, Jimmy Choo and now Versace surged after reporting earnings that were far larger than analysts were expecting. Capri Holdings’ stock jumped 11.8 percent. Sales of its Jimmy Choo and Michael Kors lines were especially strong.
FEELING CHIPPER: Skyworks Solutions jumped 11.6 percent after the semiconductor company announced a $2 billion stock buyback plan. The news sent shares in several chipmakers higher. Microchip Technology climbed 7.2 percent, while Micron Technology gained 5.7 percent.
OVERSEAS STOCK MARKET UPDATE: Major European indexes finished lower. An unexpected drop in German factory orders put a damper on sentiment. Many Asian markets were closed for the lunar new year.
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