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Disappointing Q3 Results From Amazon And Alphabet Batter Tech Stocks

Disappointing Q3 Results From Amazon And Alphabet Batter Tech Stocks
Very disappointing third quarter reports by Inc and Alphabet Inc saw a significant drop in the so-called FANG stocks and other tech shares on Thursday.
For the high-growth quartet of stocks known as FANG, the latest setback were the less than expected third quarter results announced by Amazon and Google parent Alphabet. The FANG shires also include Facebook Inc and Netflix Inc.
There was a drop of 0.8 per cent in Nasdaq futures NQcv1 and a drop of 0.5 per cent in S&P futures EScv1 which many analysts say is an indication that there might be more selling in the U.S. stock market in the next few days.
In a month that has been very volatile for the U.S. equities, the FANG sticks, the favourite of Wall Street analysts in recent years, has been battered. That has raises worries among a section of investors about a possible to the decade-old bull market.
In recent years, outsized contributions to the S&P 500’s gains have been made by the FANG group, along with heavyweight tech stocks Apple and Microsoft. And there would be a major set back for the market if there was a prolonged downturn for those stocks.
There was a drop of 8 per cent in Amazon’s stocks after the bell. The drop in stocks was reported after the company that is a global leader in online retailing and cloud computing announced an increase in its quarterly net sales to $56.58 billion compared to $43.74 billion in the same period a year ago. But despite the rise, the figure missed was lower than the expectations of the market which had expected it to be $57.1 billion, according to Refinitiv data.
Similarly analysts were disappointed with Alphabet third-quarter revenue as it came lower than expected even as its operating margin was reduced by rising expenses in the third quarter which raised concerns about its regulatory scrutiny. There was a drop of 4.7 per cent in its stocks.
And with hours, there was a drop of 3 per cent in the shares of Netflix while there was a drop  of 2.3 per cent in the shares of Facebook, which will reveal its Q3 figures this month end.
Among other tech shares, there was a 1.6 per cent drop in the shares of Apple in after hour trading while there was a 2.5 per cent drop in the stocks of Twitter. The social media platform had earlier gained 15 per cent which is the largest single day gain for the firm following its announcement of better than expected results for the third quarter.
There was also a drop of 11 per cent in the stocks of Snap in extended trade following the announcement by the Snapchat owner about a drop in its number of daily active users at 186 million in the third quarter compared to 188 million in the earlier quarter. This drop was primarily because of an app redesign and its competition with Facebook’s Instagram.

Christopher J. Mitchell

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