Stocks fall as Facebook reports disappointing earnings
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Stocks fell on Wall Street as Metaverse, Facebook parent company, plunged about 25%, erasing more than $220 billion in market value, the largest drop in history.
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Stocks are opening lower on Wall Street, Thursday, February 3 (AP)
Stocks on Wall Street tumbled Thursday, with Meta Platforms losing some $200 billion in market value after its shares plunged more than 20% due to investor dismay over Facebook's earnings.
Trading in Facebook parent slid 24% per share after the company fell short of profit expectations.
Meta’s share price drop occurred in Wednesday’s after-hours trade, right after it reported its fourth-quarter earnings following the close of regular market trading. Meta’s market capitalization stood $681.86 billion at Wednesday’s close.
If its price drop is not reversed or alleviated, Facebook’s value could plunge by $210 billion.
Meta also pulled down Wall Street with all three major US equity indices, the Nasdaq Composite, the Dow Jones Industrial Average, and the S&P 500, opening in the red and deepening losses from there.
Nasdaq took the worst hit among the three, falling 2%, since it reflected Facebook losses, the platform being one of its main components.
In the last two weeks, Nasdaq had just steadied, four weeks after non-stop losses that wiped out more than 10% in a broader market correction triggered by the Federal Reserve's worry about impending rate hikes.
The US central bank slashed lending rates to almost zero after the outbreak of the coronavirus crisis, but it says it now has to raise them to control inflation which ramps at 40-year highs.
