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A Facebook-led slump in technology companies weighed on U.S. stocks Thursday, overshadowing broad gains in other sectors. Fresh optimism among investors that trade tensions between the U.S and European Union may be on the mend, coupled with another round of strong company earnings, sent airlines, energy companies and consumer goods stocks higher. Small-company stocks did better than the rest of the market.
KEEPING SCORE: The S&P 500 index slid 8 points, or 0.3 percent, to 2,837 as of 3:42 p.m. Eastern Time. The Dow Jones Industrial Average climbed 116 points, or 0.5 percent, to 25,530. The Nasdaq composite index lost 83 points, or 1.1 percent, to 7,848. The Russell 2000 index of smaller-company stocks picked up 9 points, or 0.6 percent, to 1,694.
The S&P 500, the market’s benchmark index, is on track for its fourth weekly gain in a row.
THE QUOTE: “It’s a shock what happened to Facebook, but that little improvement in the trade picture and the continuation of the earnings results have just been spectacular,” said Ted Theodore, portfolio manager at TrimTabs Asset Management.
TRADE OPTIMISM: Investors have been mainly focused on the mostly favorable run of company quarterly earnings the past couple of weeks. At the same time, traders have been wary of global trade tensions, which have ratcheted up in recent weeks as the U.S. and some of its trading partners imposed tariffs and threatened more. But talks held Wednesday between President Donald Trump and a European Union delegation gave markets cause for encouragement after both sides agreed to start talks to dismantle trade barriers.
UNLIKED: Facebook sank 19.5 percent to $175.13 after the social media giant said that its user base and revenue grew more slowly than expected in the second quarter, and that it expects slower revenue growth ahead. The slower growth came about as the company grappled with privacy scandals.
“For such a big company to suffer such a significant decrease in price is really amazing to watch,” said Erik Davidson, chief investment officer at Wells Fargo Private Bank. “Investors are looking to see whether it’s related to this specific company, is it idiosyncratic, or related to broader issues.”
ENGINE TROUBLE: Ford Motor lost 6.1 percent to $9.88 after the automaker reported a sharp drop in profits and said it would undertake a restructuring that will cost $11 billion over the next three to five years.
TEARS IN TOYLAND: Mattel slumped 5 percent to $15.47 after the maker of Barbie and Hot Wheels reported a loss that was larger than analysts were expecting and said it would eliminate more than 2,200 jobs.
HOMES SWEET HOMES: D.R. Horton jumped 10.2 percent to $43.58 after the homebuilder reported earnings and revenue that easily beat Wall Street’s forecasts. It also announced a $400 million share repurchase program.
TAKING OFF: Several airlines traded higher, contributing to industrial sector gains. Alaska Air Group surged 8.3 percent to $64, while Southwest Airlines jumped 8 percent to $56.48. American Airlines added 4.9 percent to $40.06.
TASTY RESULTS: Shares in Mondelez International, which sells Oreo cookies and Cadbury chocolate, climbed 4.3 percent to $43.29 after the company’s latest quarterly earnings and revenue topped analyst estimates. Traders also bid up shares in rival Hershey, which gained 7.2 percent to $99.47.
LOOKING CHIPPER: Qualcomm shares rose 7 percent to $63.55 after the chipmaker reported earnings that beat analysts’ expectations and said it would abandon a bid to acquire NXP.
OIL: Benchmark U.S. crude rose 31 cents to settle at $69.61 per barrel in New York. Brent crude, used to price international oils, added 61 cents to close at $74.54.
The pickup in oil prices gave a boost to some energy stocks. Marathon Petroleum jumped 7.1 percent to $80.0679.79.
BOND YIELDS: Bond prices fell, sending yields higher. The yield on the 10-year Treasury rose to 2.98 percent from 2.97 percent.
CURRENCIES: The dollar rose to 111.23 yen from 110.83 on yen Wednesday. The euro weakened to $1.1645 from $1.1699.
METALS: Gold fell $6.10 to $1,225.70 an ounce. Silver lost 9 cents to $15.50 an ounce. Copper was little changed at $2.82 a pound.
MARKETS OVERSEAS: Major stock indexes in Europe rose. Germany’s DAX jumped 1.8 percent while France’s CAC 40 added 1 percent. Britain’s FTSE 100 gained 0.1 percent. In Asia, Japan’s Nikkei 225 lost 0.1 percent while South Korea’s Kospi added 0.7 percent. Hong Kong’s Hang Seng lost 0.5 percent.