Alphabet Earnings Drag Wall Street

The U.S. stock market finished lower on Thursday as a sharp decline in Alphabet shares offset broad gains across other sectors.

Alphabet, the parent company of Google and YouTube, released its summer financial results late Wednesday. The report showed weaker growth than analysts had predicted. The company also disclosed that its purchases of property and equipment exceeded $51 billion. This spending resulted in a higher burn of cash during the quarter.

Class A shares of Alphabet fell 12.6 percent on Thursday. That represents the largest single-day drop for the stock since it began trading more than 20 years ago. Investors expressed concern about whether the company's massive investments in artificial intelligence will generate sufficient returns.

The S&P 500 index dropped 0.3 percent, or 23.59 points, to close at 7,720.39. This marked the index's first loss in four trading days. The Nasdaq composite fell 1.4 percent, while the Dow Jones Industrial Average lost 132.54 points to end at 52,342.56.

Despite the major index losses, the majority of individual stocks within the S&P 500 rose. Four out of every five stocks in the index climbed. The market would have closed higher if not for the performance of Alphabet. Other companies reported stronger summer profits than expected, including KLA Corp, Eli Lilly, and Mastercard. DoorDash shares rose 5.6 percent after the company announced an agreement to acquire Instacart in a deal valued at $17 billion.

In the bond market, Treasury yields eased following mixed economic data. The yield on the 10-year Treasury note fell to 4.94 percent from 5.05 percent late Wednesday. Preliminary reports indicated that economic growth accelerated more than expected during the summer, driven by consumer spending and business investment in AI. However, September income growth was weaker than projected, and inflation measures worsened.

Oil prices also declined, with Brent crude falling 0.8 percent to $110.80 per barrel. In Europe, stock indexes rose after the European Central Bank held interest rates steady. Bank President Christine Lagarde stated she will resign in February, nine months before her current term ends.