The major stock indexes traded in different directions on Thursday as investors grappled with a disastrous quarterly report from Facebook.
The Nasdaq Composite dropped 1 percent to finish at 7,852.18, led by a steep decline in Facebook shares. The index posted its worst one-day loss since June 27, when it lost 1.5 percent; Facebook suffered its worst day in its history as a public company with shares closing down 18.96 percent.
The broader stock market held its ground, however, as the S&P 500 finished down 0.3 percent at 2,837.44 while the Dow Jones Industrial Average rose 112.97 points to 25,527.07 amid gains in 3M, Boeing and Travelers Companies.
The historic drop in Facebook shares came a day after its quarterly revenue missed expectations. Global daily active users, a key metric for the social media giant, also disappointed investors. Additionally, Facebook said it expects its revenue growth rate to slow down from last year. Facebook's earnings per share, however, topped Wall Street estimates.
"When you have companies that are valued to perfection, it leaves very little room for error," said Ernie Cecilia, CIO at Bryn Mawr Trust. "These companies have performed very well. The problem is that companies that are missing expectations or guiding to the light side, are getting punished much more than in year's past."
Facebook's negative results offset strong earnings from NBCUniversal-parent Comcast, Qualcomm and Advanced Micro Devices. Comcast shares rose 3.9 percent — leading Disney shares higher by 2.1 percent — while Qualcomm and Advanced Micro Devices jumped 7 percent and 14.3 percent, respectively, on better-than-expected earnings.
The social media company's decline also comes ahead of the release of Amazon's latest quarterly figures. Google-parent Alphabet rose after releasing its earnings earlier this week, but Netflix shares tanked last week following the release of its quarterly numbers.