Nasdaq 100 Suffers Sharpest Fall Since 2020; Chile Leads LatAm Losses

Meta’s poor results dragged down Snap and Pinterest shares amid concerns over tech sector growth

The Nasdaq MarketSite in New York. Photographer: Michael Nagle/Bloomberg
February 03, 2022 | 07:07 PM

A roundup of Thursday’s stock market results from across the region

🗽 On Wall Street:

A massive tech share sell-off sent the main U.S. stock indexes crashing on Thursday after Facebook’s parent company Meta’s (FB) shares slumped 26%, wiping more than $250 billion from the company’s market capitalization.

The S&P 500 (SPX) slid 2.44%, while the Dow Jones Industrials (INDU) closed 1.45% lower, the Nasdaq Composite (CCMPDL) ended the day down 3.74%, while the Nasdaq 100 (NDX), which garners major technology stocks, sank 4.22%, its biggest daily decline since September 2020.

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The poor performance of technology stocks added to the change in the stance of the world’s main central banks, which are seeking to tackle inflation by increasing their benchmark rates.

In Europe, the Bank of England raised its key rate and indicated that it would begin to reduce bond holdings. In addition, the president of the European Central Bank, Christine Lagarde, said that she no longer ruled out an interest rate hike this year, despite the fact that at Thursday’s meeting the benchmark rates remained stable.

🔑 Thursday’s Key Moments:

A spate of bad news has affected technology-linked stocks. The change in the Federal Reserve’s discourse, which plans to tighten its monetary policy at its March meeting, has pummeled the sector, which is more sensitive to interest rate hikes, and has damaged the performance it had shown at the beginning of the year.

Added to this, Meta’s quarterly report added another ingredient, after it disappointed analysts and showed signs that the company is finding it hard to fight against competitors such as TikTok.

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On Wednesday afternoon, Facebook’s parent company had reported that the social network racked up 2.91 billion monthly users in the fourth quarter of 2021, which did not represent growth over the same period a year ago.

In addition, Facebook Reality Labs, the division that includes the company’s investments in the metaverse and virtual reality, reported an operating loss of $3.3 billion.

Meta’s poor performance dragged down the shares of Snap (SNAP) and Pinterest (PINS) as concerns grow about the industry’s growth prospects. Spotify (SPOT) added more bad news, after reporting subscriber projections below Wall Street forecasts and as an artist boycott grows over a lack of content moderation.

📉 🥇 A Bad Day:

In line with the international mood, Thursday was a day of losses in Latin America after the markets were affected by the poor performance of the main indexes in the United States.

Chile’s stock market (IPSA) saw the biggest fall, after it accumulated a loss of 2.20% on the day, making for two consecutive sessions of losses.

The Central Bank of Chile published its business perceptions report, which revealed that local companies reported that domestic demand has stopped increasing as strongly as in previous quarters, while they await greater political and legislative clarity to initiate larger projects.

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Brazil’s Ibovespa (IBOV), the largest stock exchange by market capitalization, fell 0.18% after Brazil’s Central Bank raised the key interest rate to 10.75%, the highest level since May 2017, on Wednesday. While the 1.5 point increase was widely expected, the statement surprised by indicating a slower pace of tightening in upcoming meetings.

The Mexican stock market showed the same trend as abroad and closed with losses, after Wednesday’s best performance in the region by the S&P/BMV IPC.

🍝 For the Dinner Table Debate:

The crisis in which UK Prime Minister Boris Johnson’s government is mired worsened on Thursday with the resignation of four of his top aides.

The prime minister’s chief of staff, Dan Rosenfield, and his private secretary, Martin Reynolds, resigned late Thursday, following the departure of Johnson’s communications director, Jack Doyle.

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But perhaps most damaging was the departure of Munira Mirza, one of his longtime allies, who quit her post as head of Johnson’s policy unit in protest at a “defamatory” comment the prime minister made about opposition leader Keir Starmer.

The departures hit Johnson at a critical time, as he faces mounting pressure from members of his Conservative Party to resign from his post following an investigation into parties held at his official residence during lockdown.