US open: Stocks rise but Snap, Twitter in the red
US stocks rose in early trade on Friday despite disappointing earnings from Snapchat owner Snap, amid hopes the Federal Reserve could slow rate hikes.
At 1530 BST, the Dow Jones Industrial Average was up 0.7%, while the S&P 500 and the Nasdaq were 0.6% and 0.3% firmer, respectively.
Investors were mulling over a Wall Street Journal report suggesting that some Federal Reserve officials are "signalling their desire both to slow down the pace of increases soon and to stop raising rates early next year to see how their moves this year are slowing the economy".
On the corporate front, meanwhile, Snap Inc tumbled 29% after it posted lower-than-expected third-quarter revenue late on Thursday and warned of an inflation hit to ad spending.
Russ Mould, investment director at AJ Bell, said: "The numbers themselves were reasonably resilient even if restructuring costs helped push the company into a loss.
"But revenue growth is clearly slowing - to such an extent this is the slowest growth since the company floated five years ago.
"And, while its warning on advertising hit shares in other social media platform owners like Meta and Pinterest, it could be that the relevance of Snapchat with a fickle youthful user base is starting to wane.
"The emergence of TikTok and continuing popularity of Instagram means there is a significant competitive threat. Snapchat might not fade into the background soon, after all it is still adding users, but if advertisers are starting to sniff that it’s all gone a bit stale, they might start turning their noses up at using the platform to engage with consumers. Particularly given budgets are squeezed and that will force media buyers to be more selective."
Elsewhere, Twitter was 4% weaker following a report that Biden administration officials are discussing whether the US should subject some of Elon Musk’s ventures to national security reviews. Bloomberg cited people familiar with the matter as saying that this would include the deal for Twitter and SpaceX’s Starlink satellite network.
According to Bloomberg, US officials are concerned by Musk’s plans to buy Twitter with a group of foreign investors.
American Express was also in the red as it said full-year profit was set to be higher than initially expected but also that it had built bigger provisions to prepare for potential defaults in an economic downturn.