Game firms’ struggles hit stocks

A mixed bag of corporate earnings nudged U.S. stocks slightly lower Wednesday, snapping the market’s winning streak.

Communications sector stocks, led by steep declines in video game companies, accounted for most of the market’s slide.

The Dow Jones industrial average fell 21.22 points, or 0.1 percent, to 25,390.30. The S&P 500 index dropped 6.09 points, or 0.2 percent, to 2,731.61. The benchmark index had finished higher the previous five trading days.

The Nasdaq composite slid 26.80 points, or 0.4 percent, to 7,375.28. The Russell 2000 index of smaller companies gave up 2.20 points, or 0.1 percent, to 1,518.02. Major European indexes also finished lower.

Take-Two Interactive and Electronic Arts plunged after reporting earnings that fell far short of what Wall Street analysts were expecting. The companies also issued weak forecasts, citing tougher competition.

Gains in technology stocks offset some of those losses.

“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. “On balance, sales and earnings are really trending mostly above expectations.

More than half of the companies in the S&P 500 have reported results for the last three months of 2018, and most have turned in earnings that beat analysts’ forecasts.

“What we are seeing is earnings are in fact slowing, but they still remain positive,” Springmeyer said.

That’s helped to allay some investors’ fears over a slowdown in growth. Still, broader economic concerns continue to shadow the market, including uncertainty over the U.S.China trade dispute, the effect tariffs are having on profits and consumers’ wallets, and signs of a general slowdown in global growth.

The latest quarterly snapshots from video game companies failed to impress traders Wednesday.

Take-Two, maker of the Grand Theft Auto and Red Dead Redemption game series, gave investors a weak outlook for the current quarter. Electronic Arts, whose titles include The Sims and various sports games, including Madden NFL, flagged disappointing results in sales of its latest Battlefield game.

Both companies are grappling with competition from Epic Games Inc.’s hit game Fortnite.

Shares of Take-Two and Electronic Arts plunged 13.8 percent and 13.3 percent, respectively. Activision Blizzard, owner of the Call of Duty and Candy Crush games, fell 10.1 percent.

The company behind the popular photo-messaging app SnapChat surged 22 percent as advertising gains drove revenue growth in the fourth quarter. The revenue increase helped cut the company’s losses. The company also maintained its user base. The New York Times vaulted 10.3 percent in heavy trading after the newspaper publisher touted a big gain in digital subscribers and digital revenue for the October-December quarter. The

Times added 265,000 digital subscriptions in the fourth quarter. Its earnings and revenue topped Wall Street’s forecasts.

Capri Holdings, owner of the Michael Kors, Jimmy Choo and Versace clothing and footwear brands, climbed 11.3 percent after reporting quarterly earnings that were far larger than analysts were expecting.

Skyworks Solutions jumped 11.5 percent after the semiconductor company announced a $2 billion stock buyback plan. The news sent shares in several chipmakers higher. Microchip Technology climbed 7.3 percent, while Micron Technology gained 5.5 percent.