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Wall Street Slumps on Big Tech         07/24 10:04

   Drops for Big Tech are dragging U.S. stock indexes lower on Wednesday after 
profit reports for Tesla and Alphabet hit Wall Street with a thud.

   NEW YORK (AP) -- Drops for Big Tech are dragging U.S. stock indexes lower on 
Wednesday after profit reports for Tesla and Alphabet hit Wall Street with a 

   The S&P 500 was down 1.3% in morning trading and on track for its fifth fall 
in six days. The Dow Jones Industrial Average was down 342 points, or 0.8%, as 
of 10 a.m. Eastern time, and the Nasdaq composite was 2% lower.

   Tesla was one of the heaviest weights on the market after falling 12.5% The 
electric vehicle maker said its profit for the spring fell 45% from a year 
earlier, and its earnings fell short of analysts' forecasts.

   Alphabet dropped 3.3% even though it delivered better profit and revenue for 
the latest quarter than expected. Analysts pointed to some pockets of weakness 
underneath the surface, including weaker growth in advertising revenue for 
YouTube than expected.

   The larger challenge for Alphabet may have simply been how much its stock 
has already rallied, nearly 50% in the 12 months through Tuesday night, on 
expectations for continual growth.

   Profit expectations are high all along Wall Street, but particularly so for 
the small group of stocks that have come to be known as the " Magnificent 
Seven." Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla 
need to keep delivering powerful growth after being responsible for the 
majority of the S&P 500's run to dozens of records this year, while many other 
stocks struggled under the weight of high interest rates.

   The hope on Wall Street is that if momentum does flag for the Magnificent 
Seven, more stocks outside them can rise to support the market. Conditions may 
be improving at the right time. Hopes for imminent cuts to interest rates have 
helped smaller stocks in particular to jump in recent weeks.

   The Russell 2000 index of smaller stocks has leaped at least 1% in seven of 
the last 10 days, though it fell 0.8% Wednesday.

   They've been jumping as Treasury yields have eased on expectations that 
inflation is slowing enough for the Federal Reserve to begin lowering its main 
interest rate in September.

   Treasury yields fell again Wednesday after preliminary data suggested U.S. 
business activity is back to shrinking in manufacturing, though continuing to 
grow in services industries. Similar readings in Europe were weaker than 
expected. A separate report said sales of new homes unexpectedly weakened, when 
economists were forecasting an acceleration.

   The yield on the 10-year Treasury edged down to 4.23% from 4.25% late 
Tuesday and from 4.70% in April. That's a sharp move for the bond market, which 
has given support to stock prices.

   AT&T was a bright spot for the stock market, rising 3.9% after its profit 
for the latest quarter matched analysts' expectations.

   But Visa lost 3.6% after its revenue for the latest quarter came up just 
short of analysts' expectations.

   Lamb Weston lost nearly 22% for the worst loss in the S&P 500 after the 
supplier of French fries and other frozen potato products to restaurants 
reported weaker profit for the latest quarter than expected. The company said 
even fewer patrons visited restaurants during the spring than it expected in 
the United States and many of its key international markets. It also warned it 
sees challenges continuing into its fiscal year because of softer demand due to 
"menu price inflation."

   In stock markets abroad, indexes slumped across Europe and Asia.

   France's CAC 40 index fell 0.9% as shares of luxury giant LVMH dropped 3.6% 
in Paris after the owner of Louis Vuitton and Dior reported quarterly sales 
that missed expectations.

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