Nation & World

Wall Street rally pauses after underwhelming revenue forecasts

Video game makers lead percentage declines on S&P

FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S. December 28, 2016. REUTERS/Andrew Kelly/File Photo/File Photo
FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S. December 28, 2016. REUTERS/Andrew Kelly/File Photo/File Photo

NEW YORK — Stocks edged lower on Wednesday as video game makers gave disappointing revenue forecasts and investors awaited developments on U.S.-China trade relations.

The benchmark S&P 500 and the Nasdaq were weighed by declines in shares of Electronic Arts, which tumbled 13.3 percent after the video game publisher forecast full-year revenue below Wall Street estimates.

The sharp drop pulled down shares of rival video game publisher Activision Blizzard, which fell 10.1 percent.

Shares of industry peer Take-Two Interactive Software also dropped sharply, 13.8 percent, after the company’s similarly underwhelming forecast.

The slump in video game stocks contributed to a 1.5 percent decline in the S&P 500 communication services sector, the largest drop among the S&P’s major sectors.

Despite the fall, Wall Street’s indexes remained near two-month highs. A 7.3 percent gain in the S&P 500 would put the index above its record closing September high.

“The market is feeling a little exhausted after we’ve had a nice run in January and early February,” said Nathan Thooft, global head of asset allocation at Manulife Asset Management in Boston.

Investors cited a void of catalysts for market gains.

ARTICLE CONTINUES BELOW ADVERTISEMENT

“Trade talks are probably the thing that’s really intriguing to the market, but that’s in March,” said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh.

Forrest was referring to the deadline for the United States and China to reach a trade agreement before additional tariffs go into effect.

The Dow Jones Industrial Average fell 21.22 points, or 0.08 percent, to 25,390.3, the S&P 500 lost 6.09 points, or 0.22 percent, to 2,731.61, and the Nasdaq Composite dropped 26.80 points, or 0.36 percent, to 7,375.28.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.

CONTINUE READING

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.