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The stock-market pendulum swung in the other direction again Tuesday, though how exactly it treated investors' individual portfolios was largely contingent on how much technology and tech-esque exposure they had.
The major catalyst today was last night's announcement by Snap (SNAP) CEO Evan Spiegel that the company would fall well short of its internal current-quarter revenue and earnings estimates. "The macro environment has deteriorated further and faster than we anticipated when we issued our quarterly guidance last month," he says.
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Snap shares cratered 43.1% in response Tuesday and sent shockwaves throughout the rest of the digital advertising space. Google parent Alphabet (GOOGL, -5.0%), Facebook parent Meta Platforms (FB, -7.6%) and Amazon.com (AMZN, -3.2%) were all swept up in the selling pressure.
Not only did that spark a flurry of single-stock downgrades from the analyst community, but CFRA's Sam Stovall downgraded the entire communication services sector.
"A rapid recovery in any area driven by advertising and consumer spending is not expected in the near to intermediate term," he says. "What's more, increased regulatory risk directed toward t
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 Shares of Tesla Inc. dropped 3.0% in premarket trading Tuesday, after Daiwa Capital analyst Jairam Nathan reiterated his outperform rating on the electric vehicle maker but cut his price target to $800 from $1,150, citing COVID-19-related lockdowns in Shanghai and supply chain concerns impacting the ramp-up of its Austin and Berlin plants. He also cut his 2022 earnings per share estimate to $9.30 from $12.00, compared with the FactSet consensus of $12.14, and lowered his deliveries estimate to 1.2 million units from 1.4 million. Nathan noted that Tesla shut down production at its facility in Shanghai for three weeks due to lockdowns, and restarted operations at half capacity in mid-April, with reports saying normal operations will resume sometime this week. "With about 13,000 units of production per week and higher than average margins, any production loss at Shanghai is bound to have a significant impact on margins and earnings," Nathan wrote in a note to clients. Tesla derived 24.8% of its first-quarter revenue from China. He also cited concerns over the negative impact of Chief Executive Elon Musk's proposed buyout of Twitter Inc. , either on management of Tesla or on the stock from a potential divestment. Tesla's stock, which was on track to open below the 10-month closing low of $663.90 on Friday, has tumbled 36.1% year to date through Monday, while the S&P 500 has lost 16.6%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
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