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.
"People are looking at these companies and wondering if it's 1999," said Sean O'Hara, president of Pacer ETFs. "The answer is no. These are real companies with real revenue streams that generate profit."
Industrials rose amid positive news on trade. On Wednesday, President Donald Trump announced that the U.S. and the European Union had initiated a "new phase" within their relationship, explaining how both regions would start collaborating in order to lower tariffs and avoid a potential trade war.
"We agreed today, first of all, to work together towards zero tariffs, zero non-tariff barriers and zero subsidies for the non-auto industrial goods," Trump said at a press conference with Juncker. The U.S. leader, however, did not comment on whether carmaker tariffs had been dealt with; meaning, automakers will be in focus on Thursday. Trade concerns surrounding China however still remain tense.
Trump's announcement comes after trade relations between the U.S. and EU had been strained in recent months. Shares of Caterpillar rose 1.49 percent. Caterpillar is a company sensitive to trade tensions given its large exposure to overseas revenue. 3M and Boeing, two other companies with large overseas revenue exposure, rose 1.75 percent and 0.9 percent, respectively.
Treasury Secretary Steven Mnuchin also told CNBC on Thursday a deal on NAFTA is coming in the near future. "We hope to have an agreement in principle, clearly, very soon. That's the first priority," Mnuchin said on "Squawk Box."
—CNBC's Michelle Castillo contributed to this report