Video game makers tumble on a down day
A mixed bag of corporate earnings nudged U.S. stocks slightly lower Wednesday, snapping the market’s fiveday winning streak.
Communications sector stocks, led by steep declines in video game companies, accounted for most of the market’s slide. Take-Two Interactive and Electronic Arts plunged after reporting earnings that fell far short of analyst expectations and issuing weak forecasts.
Gains by technology stocks offset some of those losses, with Skyworks Solutions leading a rally in semiconductor companies.
“This is an earnings-driven market, and where you’ve seen both positive and negative price movement today it has largely been sector- and industry-specific,” said Paul Springmeyer, head of investments at U.S. Bank Wealth Management.
The Standard & Poor’s 500 index fell 6.09 points, or 0.2%, to 2,731.61. The Dow Jones industrial average slipped 21.22 points, or 0.1%, to 25,390.30. The Nasdaq composite fell 26.80 points, or 0.4%, to 7,375.28. The Russell 2000 index fell 2.20 points, or 0.1%, to 1,518.02.
More than half the companies in the S&P 500 have already reported results for the last quarter of 2018. Most beat analysts’ forecasts.
Take-Two, maker of the “Grand Theft Auto” and
“Red Dead Redemption” games, gave investors a weak outlook for the current quarter. Electronic Arts, whose titles include “The Sims” and “Madden NFL,” flagged disappointing sales of its latest “Battlefield” game. Both firms are grappling with competition from Epic Games’ hit “Fortnite.”
Take-Two and Electronic Arts plunged 13.8% and 13.3%, respectively. Activision Blizzard, maker of the “Call of Duty” and “Candy Crush” games, fell 10.1%.
A broad slide in home builder shares also weighed on the market. Hovnanian Enterprises led the pack with a 6.6% decline.
Snap, the company behind photo-messaging app Snapchat, ascended 22% as advertising gains drove revenue growth.
New York Times jumped 10.3% after the newspaper publisher touted a big quarterly gain in digital subscribers and digital revenue. Its earnings and revenue beat Wall Street forecasts.
Capri Holdings, owner of the Michael Kors, Jimmy Choo and Versace brands, jumped 11.3% after reporting earnings that were far larger than analysts expected.
Skyworks Solutions surged 11.5% after the semiconductor company announced a $2-billion stock buyback plan. The news boosted several chipmakers’ stocks. Microchip Technology climbed 7.3%. Micron Technology gained 5.5%.