By Yasin Ebrahim

Investing.com – The S&P 500 and Dow closed at record highs Tuesday, despite losing some steam into the close as a Facebook-fueled wobble in communication services stifled upside momentum. 

The record close of 5,547.79 was reached by the market with a gain of 0.18%. Closed at record 35,756.88, the gained 0.4%. Nasdaq rose 0.06%.

Facebook (NASDAQ 🙂 dropped about 4% following mixed results for its third quarter. The social media company flagged an Apple privacy change as a hindrance to its ad revenue growth.

Wall Street analysts, including some who pointed out the negative impact Facebook’s investment plan has had on their margins, have downgraded their views on Facebook.

Wedbush noted that, “Given all trends in the quarter” and the concerns surrounding iOS/ATT we think what is somewhat flying under the radar? The significant increase in total expenditures in 2022,” Wedbush wrote in a note. It had reduced its Facebook price target from $350.00 to $325.00.

It’s a busy week in big tech, with Alphabet and Microsoft reporting quarter results shortly after the close bell.

The chip sector was supported by an increase in chip stocks (NASDAQ:), as Facebook plans to invest big in its metaverse division. This is likely to boost demand for chips.

The slump caused losses in the industrial sector, which made it difficult for them to recover. Lockheed Martin A rise in can be offset United Parcel Services General Electric

Lockheed Martin (NYSE 🙂 dropped more 11% as a result of a quarter-quarter revenue decline that came short of its expectations.

United Parcel Service (NYSE 🙂 posted a positive outlook on its top and bottom line and raised its margin outlook. The logistics company was able weather inflation and raise prices. The shares rose by about 7 percent.

General Electric (NYSE) saw a 2% increase in shares after it reported better-than expected earnings and cashflow. However, revenue was below Wall Street expectations.  

Recent quarterly results have shown that prices can be raised by companies to preserve margins. This has removed any doubts about strong demand. It also helps investors to look at supply-chain issues to increase their stock bullishness.

“Companies have cited margin issues, and supply chain disruptions … but so far management teams have been able to navigate these issues,” Aptus Capital Advisors portfolio manager David Wagner told Investing.com in an interview on Tuesday. The disruptions may be temporary but investors are focusing instead on strong demand. 

Fears of these factors [including supply-chain disruptions] would potentially reduce the expected 2022 S&P 500 earnings have not come to fruition and that’s why we have markets at all-time highs,” Wagner added.

Consumer confidence rose for the first time in June, another indicator of consumer strength.

Pantheon Macroeconomics stated in a note that the October price rose to 113.8, which is well beyond expectations of 108.0. This was because the “fading Delta fears” outweighed the impact from rising energy prices.