Financial Markets                      10/29 15:22

   

   NEW YORK (AP) -- A historic drop for Alphabet's stock dragged the U.S. 
market lower Thursday after the company behind Google and YouTube reported 
weaker growth for the summer than analysts expected. The report underscored 
worries about whether all its huge investments in artificial-intelligence 
technology will pay off.

   The S&P 500 fell 0.3% for its first loss in four days, even though the wide 
majority of stocks rose within the index and across Wall Street. The Nasdaq 
composite tumbled 1.4%, while the Dow Jones Industrial Average dropped 132 
points, or 0.3%.

   Alphabet is one of the most influential stocks on Wall Street because it's 
one of the largest, and the Class A shares of its stock fell 12.6% for their 
worst day since they began trading more than 20 years ago. The tech giant had 
been under pressure to at least meet analysts' expectations for growth amid 
concerns about how much it's spending to invest in AI.

   Alphabet said late Wednesday that it burned through more cash during the 
latest quarter, according to a measure called free cash flow, after its 
purchases of property and equipment topped $51 billion.

   Worries are weighing on the entire AI industry following a frenzy to build 
data centers and fill them with AI chips. Not only are concerns high that the 
AI revolution may not produce as much profit and productivity as hoped, future 
spending on data centers is also under pressure because of how expensive it's 
become to borrow money to buy more chips.

   Alphabet's drop overshadowed what would have otherwise been a good day for 
the U.S. stock market. Four out of every five stocks within the S&P 500 
climbed, and the index would have been higher if not for Alphabet.

   Many companies rallied after reporting stronger profits for the summer than 
analysts expected, including KLA Corp. The company, whose equipment helps make 
semiconductors, rose 5.5%.

   Eli Lilly climbed 6.6%, Mastercard rose 4.2% and Merck added 3.8%.

   DoorDash rose 5.6% after saying it agreed to buy Instacart in a deal valuing 
it at $17 billion. DoorDash also reported stronger profit and revenue for the 
latest quarter than analysts expected.

   Norwegian Cruise Line Holdings steamed 13.4% higher after likewise topping 
expectations for summertime profit and revenue. It benefited from cruisers 
spending more money once aboard ships than the company expected, among other 
things.

   Expectations are high for profit growth broadly across U.S. companies. 
That's what allowed the S&P 500 to set its record earlier this month despite 
high interest rates and other worries weighing on the stock market.

   All told, the S&P 500 fell 23.59 points to 7,720.39 Thursday. The Dow Jones 
Industrial Average dropped 132.54 to 52,342.56, and the Nasdaq composite 
tumbled 365.13 to 26,184.72.

   In the bond market, Treasury yields eased following several mixed reports on 
the U.S. economy.

   The overall economy's growth may have accelerated more during the summer 
than economists expected, thanks to spending by U.S. consumers and businesses 
investing in AI, according to a preliminary report. But Americans' growth in 
incomes was weaker in September than economists expected, while a measure of 
inflation worsened.

   Fewer U.S. workers applied for unemployment benefits last week, meanwhile, 
which could indicate few layoffs across the country.

   Following the jumble of reports, the yield on the 10-year Treasury fell to 
4.94% from 5.05% late Wednesday. It's been generally pulling back since it 
topped 5.30% earlier this month and touched its highest level since 2002.

   Helping to drag yields lower on Thursday was a drop in oil prices. The price 
for a barrel of Brent crude oil fell 0.8% to $110.80.

   In stock markets abroad, indexes rose in Europe after the European Central 
Bank held interest rates steady on the continent. The bank's president, 
Christine Lagarde, also said she will resign in February, nine months before 
the end of her term.

   In Asia, indexes were mixed. South Korea's Kospi fell 1.2% due to a drop for 
market heavyweight Samsung Electronics, which sank 4.1% even though it reported 
a jump in profit.

   ___

   AP Business Writer Chan Ho-him contributed to this report.

   ___

   An earlier version of this story incorrectly said that DoorDash's profit and 
revenue for the latest quarter missed analysts' expectations. They both topped 
forecasts.

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