Stocks fall on Tencent earnings, broad mega-cap tech weakness

Markets
Insider

• US stocks tumbled Wednesday after Chinese tech giant
  Tencent reported its first profit decline in almost 13 years,
  putting pressure on the US tech sector.
• Investors are watching tech especially closely for
  signs of a growth slowdown after Facebook said it had peaked
  for the year during a disastrous earnings report.
• Follow the tech-heavy Nasdaq 100 index.

US
stocks
tumbled Wednesday after Chinese
tech giant Tencent reported its first profit decline in almost 13
years, putting pressure on the mega-cap US tech firms that
have led the market higher in recent months.

Tencent’s earnings shock is likely reminding investors of
Facebook’s similarly jarring quarterly report from late July,
when the company missed revenue targets and predicted slowing
future growth.

That disaster wound up costing Facebook $120 billion
in market value over the course of a single day — the biggest
wipeout in US stock-market history.

The broader issue at hand is the perception that
the 
mega-cap tech juggernauts so responsible
for the market’s climb to near-record levels are becoming
vulnerable. When doubts emerge over their ability to keep growing
at such a fast pace, it can result in sharp selling.

The tech-heavy Nasdaq 100 led market-wide losses in
the US, dropping as much as 1.9% at its intraday low. Meanwhile,
the Dow Jones industrial average
fell as much as 1.3% — or 334 points — while the benchmark
S&P 500 slipped 1.3% at
its daily low.

The NYSE Fang+ Index, which contains 10 of tech’s heaviest
hitters worldwide, fell more than 2.8%. Here’s the damage, listed
in decreasing order of losses.

Raw-material manufacturers in the S&P 500 also declined
more than 2% on Wednesday. Twenty-three of the 24 companies in
the sector fell on the day, led by Freeport McMoRan (-9.1%) and Newmont Mining (-5.6%).

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