Shares of Comcast and Meta were hammered in early trading today, though broader equity markets held steady despite the swirling currents of economic news and signs of a recession.
Comcast, which beat Wall Street expectations in the second quarter, also reported alarming slowdowns in broadband sign-ups and Peacock Premium subscriptions. Its stock, which typically makes modest moves of no more than a percentage point or two in a typical day, fell more than 9% to $39.34 this morning. Trading volume was slightly below average, however, indicating something less than outright panic.
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Meta Platforms, which posted its first year-over-year decline since its IPO in 2012 on Wednesday, is also being blitzed. Down more than 6%, it was around $159, in view of its 52-week low of $154.25. The tech sector will see key data points after the close of trading, when Amazon, Apple and Roku all release quarterly results. Meta CEO Mark Zuckerberg called “an economic downturn that will have a broad impact on the digital advertising industry.”
With Comcast’s shares falling, the trends revealed in its quarterly report prompted some investors to shy away from Charter Communications and Dish Network. Charter, which will release quarterly figures on Friday morning, was down 8% at $436.37, while Dish was down about 4.5% at $17.65.
Although stock markets have been volatile lately, major indices were trending positively around midday, with the Dow, S&P 500 and Nasdaq all up by a fraction. Traders digested the Federal Reserve’s three-quarter point interest rate hike on Wednesday afternoon, along with Fed Chairman Jerome Powell’s comments on the economy. While Powell believes the country has not entered a recession, gross domestic product figures released this morning indicate otherwise. Because there have been two consecutive quarters of declining GDP, most economists define the current situation as a recession. For the media and technology sector, a slowdown in advertising (seen in quarterly figures from Alphabet, Meta, Twitter and other companies) is caused by supply chain issues and other challenges. A spike in inflation this year has also put pressure on subscription businesses.