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Nasdaq falls 2% as Snap posts worst-ever single-day loss

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Nasdaq falls 2% as Snap posts worst-ever single-day loss
Shares of Snap fell 43.08% Tuesday, dragging down other major tech stocks on negative quarterly forecasts. File Photo by Monika Graff/UPI | License Photo

May 24 (UPI) -- The Nasdaq Composite tumbled Tuesday as Snap recorded its largest-ever one-day drop and dragged down other tech stocks with a negative advertising forecast.

The tech-heavy Nasdaq closed the day down 2.35%, while the broad S&P 500 fell 0.81%. The blue-chip Dow Jones Industrial Average eked out gains, rising 48.38 points, or 0.15%, after falling as much as 1.6% earlier in the session.

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Shares of Snap fell 43.08% as CEO Evan Spiegel said the company would miss earnings and revenue targets for the current quarter. He cited rising inflation and interest rates, supply chain constraints and a downturn in hiring.

Some major tech players also saw declines following the forecast, with shares of Meta dropping 7.62%, while Alphabet fell 4.95% and Amazon slid 3.21% as both hit 52-week lows.

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"The main culprit is the Snap warning from Monday evening," Adam Crisafulli of Vital Knowledge wrote in a note.

"Some are a bit incredulous that a relatively small and perennially unprofitable ephemeral social media firm can take down the whole tape, but given how sensitive this tape is, Snap is able to punch above its weight."

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The 10-year treasury yield also slipped to 2.73% after reaching as high as 3.21% earlier in the year as investors turned to bonds amid fears of a recession.

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Retail stocks also struggled Tuesday with Abercrombie & Fitch stock dropping 28.58% after reporting that freight and product costs hampered its first-quarter earnings.

Best Buy also ended the day up 1.21%, after shares were initially higher as it reported mixed quarterly earnings.

Tuesday's losses came after all three major indexes rallied to start the week.

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Amid the movement, the S&P 500 sits 18.2% from its record high after falling into bear market territory, or 20% below a record high, on Friday.

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