NEW YORK, Oct 22 ― The Nasdaq was set for a lower open today after chipmaker Intel warned of lower profit margins, while Snap Inc led declines among social media firms after flagging a hit to digital advertising from privacy changes by Apple.
Intel Corp slid 9.5 per cent in premarket trading as it missed third-quarter sales expectations, while its chief executive pointed to shortage of other chips holding back sales of the company's flagship processors.
Supply chain worries, inflationary pressures and labour shortages have been at the centre of third-quarter earnings season, with analysts expecting S&P 500 earnings to rise 33.7 per cent year-on-year, according to data from Refinitiv.
Some analysts, however, said such worries will only have a temporary impact on earnings from mega-cap technology and communications companies this reporting season.
“Intel also produced less than stellar results. Shorting big-tech has been a good way to lose money in the past two years, and I expect only a temporary aberration,” wrote Jeffrey Halley, senior market analyst, Asia Pacific at OANDA in a client note.
The S&P 500 index closed at a record high yesterday and is set for weekly gains of 1.8 per cent, to extend a bullish run for the third consecutive week.
“The S&P is making new highs while we're in the middle of the supply chain issue so the market is telling you 'I know about this and I'm not worried',” said Eric Diton, president and managing director of the Wealth Alliance in New York.
“We're still in a very low interest rate environment, coupled with a global economic recovery that is going to have fits and starts and a still accommodative Federal Reserve, and that is not the input for a major bear market.”
American Express Co rose 2.1 per cent, set to boost the Dow Jones Industrial Average at open, on topping Wall Street profit estimates for the fourth straight quarter.
Facebook Inc fell 4.2 per cent and Twitter Inc lost 3.2 per cent after Snap Inc said privacy changes by Apple Inc on iOS devices hurt the company's ability to target and measure its digital advertising.
Snap plummeted 20.0 per cent on the news and cast doubts over quarterly reports next week from Facebook and Twitter, social media firms that rely heavily on advertising revenue.
Apple edged up 0.2 per cent. Other growth stocks including Tesla Inc, Microsoft Corp and Netflix Inc also rose, limiting declines on Nasdaq 100 e-minis.
At 8.26am ET, Dow e-minis were up 62 points, or 0.17 per cent, S&P 500 e-minis were up 3 points, or 0.07 per cent, and Nasdaq 100 e-minis were down 29.75 points, or 0.19 per cent.
Mattel Inc jumped 7.7 per cent after it raised its 2021 sales forecast yesterday, saying it would overcome industry-wide shipping disruptions. ― Reuters
