5 things to know before the stock market opens Thursday, Feb. 3

On Feb 3, 2022

Here are the most important news, trends and analysis that investors need to start their trading day:

1. Nasdaq futures sink as Facebook plunges over 20% after weak earnings

The Nasdaq logo is displayed at the Nasdaq Market site in Times Square in New York City, December 3, 2021.

Jeenah Moon | Reuters

Nasdaq futures sank more than 2% on Thursday, dragged down by an over 20% premarket decline in shares of Meta Platforms, the morning after the Facebook parent reported weak earnings and lower guidance. Other social media stocks, including Snap and Twitter, also fell sharply in Thursday’s premarket. Spotify, which has been embroiled in a controversy over podcaster Joe Rogan, dropped nearly 9% in the premarket after the audio streamer late Wednesday announced a slowdown in premium subscriber growth as part of mixed fourth-quarter financial results.

2. Facebook blames cautious guidance on an expected ad spending slowdown

Facebook’s new rebrand logo Meta is seen on smartpone in front of displayed logo of Facebook, Messenger, Intagram, Whatsapp and Oculus in this illustration picture taken October 28, 2021.

Dado Ruvic | Reuters

Meta’s quarterly miss on its bottom line was only the third time that has happened in the Facebook parent’s nearly decade history as a public company. While revenue at the tech giant came in better than expected, aggressive investments in augmented/virtual reality pressured overall profitability, while changes to Apple’s iOS user tracking policy continued to hurt ad targeting and measurement. Meta blamed its cautious outlook on factors including a decline in user engagement and rising inflation taking a toll on advertiser spending.

Meta introduced a new earnings format, now reporting results in two segments: Family of Apps, which includes Facebook, Instagram, Messenger, WhatsApp and other services; and Reality Labs, which includes augmented- and virtual reality-related consumer hardware, software and content.

3. Dow stocks, Honeywell and Merck, lead Thursday’s earnings parade

Honeywell International Inc. signage is displayed on a monitor on the floor of the New York Stock Exchange (NYSE) in New York.

Michael Nagle | Bloomberg | Getty Images

Share of Dow component Honeywell International dropped 3.5% in the premarket after the company on Thursday reported mixed fourth-quarter results, beating estimates on earnings and missing on revenue. Honeywell issued forecasts for full-year earnings and revenue that were light of what analysts had been expecting.

Medicine pill is seen with Merck logo displayed on a screen in the background in this illustration photo taken in Poland on October 4, 2021.

NurPhoto | NurPhoto | Getty Images

Dow stock Merck rose 1% in the premarket after the drugmaker on Thursday reported better-than-expected earnings and revenue for the fourth quarter. Merck expects full-year adjusted per-share profit between $7.12 and $7.27 compared with estimates for $7.29. The company sees full-year revenue of $56.1 billion to $57.6 billion…