Stocks Tumble; Silicon Valley Giants Hit Hard; GoPro Layoffs
SAN JOSE (CBS SF) – Stocks dropped sharply again Wednesday with the shares of Silicon Valley tech giants Apple, Google, Yahoo and Facebook all closing much lower.
Apple dropped 2.5 percent to 97.39 a share at the closing bell while Google shares fell by nearly 5 percent and Yahoo 4 percent.
Trades in shares of GoPro were halted right after the closing bell as the company announced it would be eliminating about 100 jobs after its fourth-quarter sales fell far short of its expectations.
GoPro says fourth-quarter revenue was $435 million instead of the $500 million to $550 million it forecast in October. The company lowered the price of its new Hero4 Session camera after saying it made the product too expensive, which reduced its fourth-quarter revenue by $21 million.
FactSet says analysts expected GoPro to report $521.2 million in revenue.
The San Mateo company had around 1,500 employees at the end of 2015 after hiring more than 500 people that year.
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Facebook also was off nearly 4 percent, Twitter shares nearly 5 percent and Amazon -- which doubled in value in 2015 --was down nearly 6 percent.
The Dow was off more than 360 percent, losing 2.21 percent of its value to end at 16,151.41. The NASDAQ was off 3.41 percent and The Standard & Poor's 500 index dropped 2.5 percent.
The S&P's 500 was about 10 percent below its recent peak reached in November and reached the level of a market "correction" something that last happened in August.
Energy companies continued to drop even as the price of oil had a rare up day. Traders are increasingly worried that a plunge in the price of crude to near $30 a barrel will lead to more strain, layoffs and bankruptcies for oil and gas companies.
THE QUOTE: "We're still waiting to see how earnings come out, and whether oil prices move back down again or stabilize here," said Ed Keon, managing director and portfolio manager for QMA.
ENERGY: The price of oil ended slightly higher after a day of wavering between gains and losses. Benchmark U.S. crude edged up 4 cents to close at $30.48 a barrel in New York. It had been up more than 3 percent in the first hour of trading, but stumbled on a report showing that demand for fuels slipped last week. Prior to that, crude had fallen for the previous seven trading days. It's down 18 percent so far this year.
Brent crude, a benchmark for international oils, fell 57 cents, or 1.8 percent, to $30.31 a barrel in London.
TIED TO OIL: Several oil and gas companies fell sharply as crude prices wavered. Williams Cos. tumbled $2.58, or 15.6 percent to $13.95. Consol Energy slid 82 cents, or 12.2 percent, to $5.88. Valero Energy shed $6.39, or 9 percent, to $64.80.
DISAPPOINTING OUTLOOKS: Investors sold off shares in Ford Motor and auto parts supplier BorgWarner after both companies issued earnings outlooks that fell short of Wall Street's expectations. Ford fell 69 cents, or 5.3 percent, to $12.17. BorgWarner lost $3.89, or 10.4 percent, to $33.51.
EARNINGS UNDERWHELM: Railroad operator CSX and supermarket chain SuperValu were down after the companies reported their latest quarterly results. CSX slid $1.60, or 6.8 percent, to $22.10. SuperValu fell 68 cents, or 11.3 percent, to $5.33.
DEAL PLANS: MetLife climbed 3.3 percent after the company said it plans to sell or spin off a large part of its life insurance business. The stock gained $1.38 to $43.37.
OVERSEAS: In Europe, Germany's DAX fell 0.2 percent while France's CAC 40 rose 0.3 percent. The FTSE 100 of leading British shares gained 0.5 percent. In Asia, stocks rallied despite a 2.4 percent drop in the Shanghai Composite. Japan's Nikkei 225 stock index jumped 2.9 percent while Hong Kong's Hang Seng gained 1.1 percent. South Korea's Kospi and Australia's S&P/ASX 200 added 1.3 percent. Shares in New Zealand and Southeast Asia were mostly higher.
BONDS AND CURRENCIES: The yield on the 10-year Treasury note fell to 2.07 percent from 2.11 percent late Tuesday. Trading in foreign exchange markets was subdued. The euro was little changed at $1.0857 and the dollar rose to 117.89 yen from 117.58 yen.
METALS: Precious and industrial metals futures closed mostly higher. Gold rose $1.90 to $1,087.10 an ounce, silver rose 41 cents to $14.16 an ounce and copper was little changed at $1.96 a pound.
OTHER ENERGY TRADING: Wholesale gasoline fell 3.2 cents to $1.053 a gallon, heating oil fell 2.1 cents to 96.9 cents a gallon and natural gas rose 1.2 cents to $2.269 per 1,000 cubic feet.
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