A potentially historic drop for Alphabet’s stock is dragging the US market lower after the company behind Google and YouTube reported weaker growth than analysts expected.
asserted
analysts → drag → growth
The report underscored worries about whether all its huge investments in artificial-intelligence technology will pay off.
asserted
investments → underscore → technology
The S&P 500 fell 0.5 per cent and was on track for its first loss in four days, while the Nasdaq composite tumbled 1.5 per cent.
asserted
composite → fall → days
Most of the rest of the stocks on Wall Street were rising, though, and the Dow Jones Industrial Average was down 0.5 per cent, or 263 points, in mid-afternoon trade.
asserted
Average → rise → trade
The Australian sharemarket is set to rise, with futures at 4.41am AEDT pointing to a gain of 12 points or 0.1 per cent at the open.
asserted
futures → set → open
The ASX added 0.5 per cent on Thursday.
asserted
ASX → add → Thursday
The Australian dollar was 0.3 per cent lower at US70.34¢.
Alphabet is one of the most influential stocks on Wall Street because it’s one of the largest, and its loss of 12.9 per cent had it heading toward its worst day since it began trading more than 20 years ago.
asserted
it → ’ → day
It was under pressure to at least meet analysts’ expectations for growth amid concerns about how much it’s spending to invest in AI.
asserted
it → meet → AI
Alphabet said late Wednesday that it burned through more cash during the latest quarter, according to a measure called free cash flow, after its purchases of property and equipment topped $US51 billion ($72.5 billion).
Worries are weighing on the entire AI industry following a frenzy to build data centres and fill them with AI chips.
uncertain
Worries → say → chips
Not only are concerns high that the AI revolution may not produce as much profit and productivity as hoped, future spending on data centres is also under pressure because of how expensive it’s become to borrow money to buy more chips.
uncertain
it → produce → chips
Several companies rallied after reporting stronger profits for the summer than analysts expected, including KLA Corp.
asserted
analysts → rally → summer
The company, whose equipment helps make semiconductors, rose 5.9 per cent.
asserted
equipment → help → semiconductors
Eli Lilly climbed 5.8 per cent, Mastercard rose 4.2 per cent and Merck added 4.5 per cent.
asserted
Merck → climb → cent
DoorDash rose 5.3 per cent after saying it agreed to buy Instacart in a deal valuing it at $17 billion.
asserted
it → rise → billion
DoorDash also reported stronger profit and revenue for the latest quarter than analysts expected.
asserted
analysts → report → quarter
Norwegian Cruise Line Holdings steamed 13.3 per cent higher after likewise topping expectations for summertime profit and revenue.
asserted
Holdings → steam → profit
It benefited from cruisers spending more money once aboard ships than the company expected, among other things.
asserted
company → benefit → things
That’s what allowed the S&P 500 to set its record earlier this month despite high interest rates and other worries weighing on the stock market.
asserted
S&P → ’ → market
In the bond market, Treasury yields eased following several mixed reports on the US economy.
asserted
yields → ease → economy
The overall economy’s growth may have accelerated more during the summer than economists expected thanks to spending by US consumers and businesses investing in AI, according to a preliminary report.
uncertain
economists → accelerate → report
But Americans’ growth in incomes was weaker in September than economists expected, while a measure of inflation worsened.
asserted
measure → expect → inflation
Fewer US workers applied for unemployment benefits last week, meanwhile, which could indicate few layoffs across the country.
uncertain
which → apply → country
Following the jumble of reports, the yield on the 10-year Treasury fell to 5.00 per cent from 5.05 per cent late Wednesday.
asserted
yield → follow → cent
It’s been generally pulling back since topping 5.30 per cent earlier this month and touching its highest level since 2002.
asserted
It → pull → 2002
Helping to pull yields lower on Thursday was a drop in oil prices.
asserted
drop → help → prices
The price for a barrel of Brent crude oil sank 0.9 per cent to $US110.67.
asserted
price → sink → US110.67
In stock markets abroad, indexes rose in Europe after the European Central Bank held interest rates steady on the continent.
asserted
Bank → rise → continent
The bank’s president, Christine Lagarde, also said she will resign in February, nine months before the end of her term.
asserted
she → say → term
South Korea’s Kospi fell 1.2 per cent due to a drop for market heavyweight Samsung Electronics, which sank 4.1 per cent even though it reported a jump in profit.
asserted
it → fall → profit
The Aporia
