Wall Street slides with Facebook shares

By Margreet Dietz

Trader Patrick McKeon, centre, works on the floor of the New York Stock Exchange. Photo / AP
Trader Patrick McKeon, centre, works on the floor of the New York Stock Exchange. Photo / AP

Wall Street slid, as Facebook shares dropped, while the uncertainty about the outcome of the US presidential election continued to weigh on sentiment.

Shares of Facebook sank, down 5.5 per cent as of 1.25pm in New York, after the company warned of a slowing pace of revenue growth.

"We expect revenue growth rates will decline as we lap strong quarters," Facebook's Chief Financial Officer David Wehner said in a conference call with investors, according to CNBC. Wehner also warned of an increase in expenses next year.

In 1.45pm trading in New York, the Dow Jones Industrial Average slipped 0.05 per cent, while the Nasdaq Composite Index dropped 0.6 per cent. In 1.30pm trading, the Standard & Poor's 500 Index fell 0.2 per cent.

The US presidential election, seemingly tighter than previously thought, also dampened the mood on the markets. The latest polls showed Democratic candidate Hillary Clinton marginally ahead of Republican Donald Trump.

"Until a week ago, the market calculated Hillary would win, but now the race seems to be on again," Christian Zogg, head of equity and fixed income at LLB Asset Management in Vaduz, Liechtenstein, told Bloomberg.

"Nobody knows really what to expect from Trump, so the market is bound to get nervous."

Meanwhile, investors are awaiting the government's jobs report, due on Friday, to gauge the odds of a Federal Reserve interest rate increase next month.

The report is expected to show that nonfarm payrolls rose by 175,000 last month, after rising by 151,000 in September, while the unemployment rate is seen slipping to 4.9 per cent, according to a Reuters poll.

A Labor Department report on Thursday showed that initial claims for state unemployment benefits rose 7,000 to a seasonally adjusted 265,000 for the week ended October 29, the highest level in more than three months.

"US jobless claims remain supportive of labour market improvement," Michael Gapen, chief economist at Barclays in New York, told Reuters.

We expect revenue growth rates will decline as we lap strong quarters.
David Wehner, Facebook's chief financial officer

The Dow fell as slides in shares of Intel and those of Apple, down 1.7 per cent and 1.4 per cent respectively, outweighed advances in shares of Walt Disney and those of 3M, up 1.8 per cent and 0.9 per cent respectively.

CF Industries, a US producer of nitrogen fertiliser, posted a larger-than-expected quarterly loss because of lower prices.

The stock dropped, trading 7.7 per cent weaker as of 1pm trading in New York.

In Europe, the Stoxx 600 Index finished the day little changed from the previous close.

The UK's FTSE 100 Index dropped 0.8 per cent, Germany's DAX Index fell 0.4 per cent, while France's CAC 40 Index slipped 0.1 per cent.

The pound strengthened after a UK court ruled that Parliament must vote on Brexit, deciding whether the country can start the process of leaving the European Union.

- BusinessDesk

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