Alphabet Sinks 11.8%, Small Caps Rally on Strong GDP Growth: Stock Market Today
Wall Street split in two at midday Thursday. Alphabet Inc. dragged the Nasdaq 100 lower after a costly quarter, while small caps and most Alphabet fell 11.8%, on track for its worst session on record. Third-quarter earnings came in at $2.12 per share, well below the $3.02 consensus, as capital spending more than doubled to $51.4 billion and free cash flow turned negative for a second straight quarter.The slide erased about $470 billion of Alphabet’s market value by midday, even as Google Cloud revenue jumped 103% to $30.7 billion.The economy gave investors a reason to look elsewhere.Gross domestic product grew at a 3.4% annualized pace in the third quarter, above the 3.2% consensus and up from 2.2% in the second quarter. Meanwhile, the core personal consumption expenditures price index rose 3.1% from a year earlier in September, in line with estimates.As a result, the Russell 2000 gained 1.2% while the Nasdaq 100 lost 1%. If those moves hold into the close, it would be the first session since July 2024 in which small caps rose more than 1% while the Nasdaq 100 fell more than 1%.Breadth told the same story. In the Russell 1000, 764 stocks were higher and 256 lower, roughly three gainers for every loser.Bonds Are CalmThe 10-year Treasury yield slipped 1 basis point to 4.99%, back below the 5% mark it held before the data. The 2-year yield fell 2 basis points to 4.67%, and the 30-year yield was flat at 5.33%.On Wednesday, the Federal Reserve held rates at 3.75%-4.00%. Before Thursday’s data, traders priced an 83% probability of a 25-basis-point hike at the Dec. 9 meeting, according to the CME FedWatch tool.Oil retreated. West Texas Intermediate crude fell 2.3% to $100.44 a barrel, and Brent lost 1.8% to $109.61. Gold futures eased 0.4% to $4,036 an ounce, while silver dropped 2.2% to $52.50. Bitcoin rose 0.5% to about $81,611.The S&P 500 slipped 0.2% to 7,726, down 18 points.The Dow Jones Industrial Average fell 0.2% to 52,363. Caterpillar Inc. weighed most, down 8.1% after third-quarter revenue missed forecasts. However, Merck & Co. Inc. rose 4.3% after lifting the midpoint of its 2026 guidance.The Nasdaq 100 fell 1% to 29,502. Microsoft Corp. slipped 1.6% despite earnings of $4.89 per share against a $4.72 consensus. In contrast, Meta Platforms Inc. gained 2.6% and Apple Inc. rose 1.5%.The Russell 2000 climbed 1.2% to 2,864.Thursday’s Performance In Major US IndicesIndexLast% ChangeMTDYTDS&P 5007,726.00-0.23%+0.97%+12.86%Dow Jones52,362.62-0.21%+2.86%+8.95%Nasdaq 10029,501.85-1.04%-2.98%+16.84%Russell 20002,863.62+1.17%+2.39%+15.38%According to the platform:The Vanguard S&P 500 ETF ) slipped 0.4%.The SPDR Dow Jones Industrial Average ETF Trust DIA) fell 0.5%.The Invesco QQQ Trust dropped 1.3%.The iShares Russell 2000 ETF (NYSE:IWM) rallied 1.1%.Drugmakers Lead as Software SinksHealth care led the S&P 500’s sectors. The State Street Health Care Select Sector SPDR ETF (NYSE:XLV) rose 2%, lifted by strong drugmaker earnings. Eli Lilly and Co. gained 6.3% after raising its 2026 revenue outlook to $91 billion-$92 billion on third-quarter sales of $24.4 billion.The iShares U.S. Pharmaceuticals ETF (NYSE:IHE) advanced 2.6%.Communication services lagged. The State Street Communication Services Select Sector SPDR ETF (NYSE:XLC) fell 1.6%, as Alphabet is among its largest holdings.Real estate, utilities and financials also rose between 1.4% and 1.8%, with Mastercard Inc. up 4.3% after its quarterly report, while technology lost 1.1% and energy slipped 0.4%.Software Takes a Hit The iShares Expanded Tech-Software Sector ETF slid 4.1%.ServiceNow Inc. plunged 25.6%, heading for its worst day on record. Earnings of $1.00 per share missed the $1.02 estimate, and the company guided fourth-quarter growth in current remaining performance obligations to 18.5% in constant currency.Fortinet Inc. tumbled 21.5%. Earnings of $0.91 per share beat the $0.86 consensus, but service revenue grew only 13% to $1.31 billion.Sprouts Farmers Market Inc. sank 22% after projecting a 1.7% decline in full-year comparable store sales.Alnylam Pharmaceuticals Inc. dropped 17.3% despite beating estimates, as U.S. demand growth for its amyloidosis drugs slowed to $81 million from $129 million in the second quarter.Service Corp. International lost 12.3% after lowering its full-year adjusted earnings outlook to $3.94-$4.04 per share.On the UpsideADT Inc. soared 33.5% after agreeing to be taken private by Thrive Holdings for $10 per share in cash, a 45.6% premium to its Oct. 27 close.Crocs Inc. jumped 25.7% after raising its full-year revenue and adjusted earnings outlook, as both the Crocs and HeyDude brands grew in the third quarter.Insmed Inc. climbed 17.9% after third-quarter revenue of $524.4 million topped estimates and it raised 2026 sales guidance for Brinsupri to $1.35 billion-$1.4 billion.Carvana Co. rallied 15.1% after quarterly revenue topped $8 billion for the first time.Textron Inc. rose 14.6% after adjusted earnings climbed to $1.76 per share from $1.55 a year earlier and it raised its full-year earnings and cash flow outlook.Thursday’s Russell 1000 Top GainersName% ChangeADT Inc.+33.54%Crocs Inc.+25.66%Insmed Inc.+17.91%Carvana Co.+15.06%Textron Inc.+14.58%Thursday’s Russell 1000 Top LosersName% ChangeServiceNow Inc.-25.59%Sprouts Farmers Market Inc.-21.95%Fortinet Inc.-21.49%Alnylam Pharmaceuticals Inc.-17.33%Service Corp. International-12.31%What’s NextAmazon.com Inc. lost 2.7% ahead of its report, which is due after today’s market closes. Analysts expecting earnings of $1.97 per share.Gilead Sciences Inc. also reports, with a consensus of $2.19 per share.Preview Photo: Shutterstock