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US: Facebook dives, weighing on stocks


[NEW YORK] US stocks mostly fell on Thursday, with Facebook plummeting on disappointing results, as investors reacted to the US-European Union trade announcement with a mixture of optimism and caution.

The tech-rich Nasdaq Composite Index stumbled one percent to 7,852.18, weighted down by Facebook, which lost nearly 20 per cent, its biggest daily loss ever.

The broad-based S&P 500 shed 0.3 per cent to 2,837.43, while the Dow Jones Industrial Average advanced 0.5 per cent to 25,527.68.

The session was the first full day of trading after US President Donald Trump and European Commission President Jean-Claude Juncker agreed to suspend additional tariff actions while they negotiate a broader agreement, deescalating a trade war.

US stocks, which had surged Wednesday at the first signs of the accord, were more muted on Thursday.

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"I don't think a positive statement means the (trade) war is over," said Nathan Thooft, an analyst at John Hancock Asset Management.

"This trade dynamic is going to last for six months, it's not going to resolve magically by itself."

Sentiment was also dented by the downcast outlook by Facebook, which signaled it expects slower user growth, partly due to the effect of data privacy scandals. Profits will also likely be hit by costly investments to address the problems.

"Every company reaches a level where they can't continue to grow as they have been," said Adam Sarhan, of 50 Park Investments, who said Netflix is at a similar juncture.

"It's the law of large numbers."

Among other companies reporting results, American Airlines rose 4.8 per cent, Biogen tumbled 10.2 per cent and Ford sank 6.0 per cent.

Computer chip company Qualcomm surged 7.0 per cent as it dropped a US$43 billion bid to acquire Dutch rival NXP on Thursday after failing to win approval from antitrust authorities in China.

US shares of NXP fell 5.7 per cent.


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