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Gains for some tech giants nudge S&P to another record high

Associated Press

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Tech S&P

Technology companies helped lift stocks higher on Wall Street, nudging the S&P 500 to its third straight all-time high, even as other parts of the market faltered.

A burst of buying in the final 10 minutes of trading sent the benchmark index 0.2% higher. The S&P 500 had been down 0.3% earlier amid another bout of choppy trading as Wall Street awaits the latest take from the Federal Reserve on inflation.

Investors are trying to gauge the strength of the economic recovery and whether emerging signs of inflation will be transitory, as the central bank believes. The Fed delivers its interest rate policy update Wednesday afternoon.

“Most of this is just positioning in front of the Fed later this week,” said Willie Delwiche, investment strategist at All Star Charts. Investors are “trying to get a sense of not just what the Fed is going to say in terms of announcements, but what they expect in terms of the path of monetary policy and the economy going forward.”

The S&P 500 added 7.71 points to 4,255.15. The index has notched a weekly gain three weeks in a row. The Dow Jones Industrial Average fell 85.85 points, or 0.2%, to 34,393.75. The Nasdaq rose 104.72 points, or 0.7%, to 14,174.14.

Small-company stocks fell. The Russell 2000 index lost 9.66 points, or 0.4%, to 2,326.15.

Among the tech sector winners Monday were Apple, which rose 2.5%, and Adobe, which gained 2.9%. Several large communications companies also made gains. Facebook rose 1.7% and Netflix gained 2.3%. Those gains offset a broad decline in financial, industrial and materials stocks, among others. JPMorgan dropped 1.7%.

Wall Street is trying to gauge the strength of the economic recovery, the impact rising inflation is having on its trajectory, and the Fed’s next move.

Investors have been worried that the Fed could ease up on bond purchases and other stimulus measures as the economy recovers. No policy changes are expected immediately, but comments on a shift in policy could jostle an already skittish market.

Fed officials have maintained that any rise in inflation will be temporary as the economy recovers.

“There’s still this debate on inflation and, notwithstanding what the Fed does and whether yields move down, there’s still some upward pricing pressure,” said Tom Martin, senior portfolio manager with Globalt Investments.

A boost in demand for goods has helped fuel a rise in the cost of everything from food to cars and household goods. Shipping costs are also rising and adding to the increase in prices. The uncertainty over inflation has been fueling much of the back-and-forth in the market between stocks that are considered safer value holdings versus those with more potential for sharp growth.

“As you go into the summer and you have uncertainty about inflation, the fed and the stimulus, you’ll kind of see people neutralizing bets,” Martin said.

Lordstown Motors sank 18.8% after the CEO and CFO resigned as problems mount for the startup electric truck maker.

Novavax gave up an early gain, dropping 0.9%. The vaccine maker said its COVID-19 shot was highly effective against the disease and also protected against variants in a large study in the U.S. and Mexico. The company is facing raw-material shortages, though, and plans to seek authorization for the shots by the end of September.

Bond prices fell, sending yields mostly higher. The yield on the 10-year Treasury note rose to 1.50% from 1.46% late Friday.

“You don’t get a message from the bond market that it’s worried either about persistent inflation or about the Fed doing something dramatic in terms of not being the buyer of bonds that it has been in recent quarters,” Delwiche said.

European markets were mostly higher. Several markets in Asia were closed for a holiday.


By DAMIAN J. TROISE and ALEX VEIGA AP Business Writers

Technology

What to expect from Facebook’s smart glasses

Rim Zrein

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Facebook

During Facebook’s recent earnings call, Mark Zuckerberg confirmed the company’s next hardware release will debut the tech giant’s collaboration with Ray-Ban eyewear on a pair of augmented reality glasses. 

The long-awaited Ray-Ban “smart glasses” were supposed to launch in 2021. However, as a steep plunge in COVID-19 cases forced most of the world into a lockdown, a lot of tech firm’s plans changed. 

“Looking ahead here, the next product release will be the launch of our first smart glasses from Ray-Ban in partnership with EssilorLuxottica,” Facebook head and CEO Mark Zuckerberg said. “The glasses have their iconic form factor, and they let you do some pretty neat things.”  

The “neat things” Zuckerberg is talking about remains a mystery. However, the smart glasses concept came up while Zuckerberg was describing his outlook on Facebook’s future, which includes a virtual reality unlike no other

“I’m excited to get these into people’s hands and to continue to make progress on the journey towards full augmented reality glasses in the future,” Zuckerberg expressed. 

Considering Zuckerberg’s comments on the release didn’t satisfy tech fan’s curiosity, CNET spoke with Andrew Bosworth, Facebook’s head of AR/VR hardware, who explained that they’re indeed smart glasses, but not AR glasses as Facebook has said so far. 

“We’re being careful not to call them augmented reality glasses. When you’re overlaying digital artifacts onto the world, that’s really augmented reality. These aren’t augmented reality glasses. However, they do a lot of the concepts we think will eventually be critical for augmented reality glasses,” Bosworth said. 

The features of the smart glasses aren’t all unique. However, as much as it’s ironic to state, Bosworth made it clear that one of the things Facebook is looking at for all their AR, starting with the smart glasses, is how can they help users be more present. 

This isn’t the first attempt a major tech company produces smart glasses, as Google did quite a stir back in 2014 following the release of “Google Glass,” which was a bold move, but failed nonetheless.  

The idea seemed exciting, but eventually transformed into an online meme. Besides, many weren’t keen with the idea of having a tech tool constantly emitting radiations at face level. 

The road to actual AR glasses could take more time than anticipated, while other tech giants hunt after similar goals.  

The Ray-Ban glasses coming this year will be a steppingstone into Zuckerberg’s “metaverse” vision for Facebook, but they likely won’t do as much as we’d like to believe. 

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Facebook profits top $10B as its CEO exalts the ‘metaverse’

Associated Press

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Facebook profits top $10B as its CEO exalts the 'metaverse'

Concerns about a revenue growth slowdown pushed Facebook’s shares lower in after-hours trading Wednesday, not long after the company reported that its second-quarter profits doubled thanks to a massive increase in advertising revenue.

But CEO Mark Zuckerberg set his sights far beyond the second half of 2021, exalting what he sees as the next phase of how people experience the internet. What the rest of the world might know as augmented and virtual reality with a dash of science fiction, Zuckerberg and others are calling “the metaverse,” a futuristic and somewhat vague notion that encompasses AR, VR and new, yet-to-be-imagined ways of connecting to one another via technology.

Zuckerberg expects the metaverse to be the next big thing after the mobile internet, although he’s had a spotty track record when it comes to predicting major trends of the near future. At Facebook’s f8 conference four years ago, for instance, Zuckerberg predicted a future where you will sit in your bedroom wearing a headset and take a virtual vacation with faraway friends and family, or use your smartphone’s camera to virtually spruce up your dinky apartment.

So far, this has not materialized. Then there’s Libra — now known as Diem — a cryptocurrency project Facebook launched in 2019 amid great fanfare. At the time, Facebook envisioned Libra as an emerging global digital currency; its ambitions have since been scaled back considerably amid regulatory and commercial backlash.

In a conference call with analysts, Zuckerberg called the metaverse the “next generation of the internet and next chapter for us as a company,” one that he said will create “entirely new experiences and economic opportunities.”

For now, though, Facebook still has to contend with more mundane matters such as antitrust crackdowns in the U.S. and elsewhere as well as concerns about how it handles vaccine-related and political misinformation on its platform. The company said, as it has before, that it expects challenges in its ability to target ads this year — including regulatory pressure and Apple’s privacy changes that make it harder for companies like Facebook to track people who can opt out of that form of surveillance.

Although the social network doubled its profit in the second quarter, in part because of higher average prices it charged for the ads it delivers to its nearly 3 billion users. But the company said it doesn’t expect revenue to continue to grow at such a breakneck pace in the second half of the year.

“This quarter’s results are extremely strong and show little sign of impact from Apple’s iOS update as of yet,” said eMarketer analyst Debra Aho Williamson, noting that in the year-ago quarter Facebook saw its slowest revenue growth since going public, so it was an easy comparison. “But it’s also due to the fact that there is enormous demand for Facebook and Instagram advertising, and more competition leads to higher ad prices.”

Separately, Facebook said on Wednesday that it will make vaccines mandatory for employees in the U.S. who work in offices. Exceptions will be made for medical and other reasons. Google announced a similar policy earlier in the day.

The Menlo Park, California-based company earned $10.39 billion, or $3.61 per share, in the April-June period. That’s up from $5.18 billion, or $1.80 per share, a year earlier. Revenue jumped 56% to $28.58 billion from $18.32 billion. Analysts, on average, were expecting earnings of $3.04 per share and revenue of $24.85 billion, according to a poll by FactSet.

Advertising revenue growth was driven by a 47% year-over-year increase in the average price per ad and a 6% increase in the number of ads shown to people. Facebook said it expects ad prices, not the amount of ads it delivers, to continue to drive growth.

The company predicted uncertainty for 2021 back in January, saying its revenue in the latter half of the year could face significant pressure. Because revenue grew so quickly in the second half of 2020, Facebook said at the time that it could have trouble keeping up that pace.

Williamson said the third quarter will be an important one for the company, “as the full effects of the Apple update take hold.”

“We will have a much better sense of how well Facebook has been able to adjust its core ad targeting products to manage the reduced amount of information it can tap into,” she said.

Facebook had 2.9 billion monthly users as of June, up 7% from a year earlier.

Shares fell $11.77, or 3.2%, to $373.28 in after-hours trading. Earlier in the day, the stock hit an all-time high of $377. 55 in anticipation of the results, so the decline wasn’t unexpected.

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Google requests privacy policy for Play store apps

Hala Turk

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Google announced on Wednesday that Android developers will be required to include a privacy policy with their apps starting April 2022.

This request is not new, as the Big Tech revealed earlier in May that developers must declare their safety information within a deadline between October and April.

However, Google decided this week to provide more details on the kind of data developers need to provide for the new mandatory policy.

The app policies will allow users to view safety and privacy guidelines before downloading the app, which will let them understand how their data is collected, protected, and used in advance.

The mandatory privacy policy covers all apps, including those that don’t collect personal or sensitive user data. Which is a new feature since previously only apps that collected personal information had to disclose their policies on the Play store.

The safety section on the Play Store will require app developers to disclose their security practices, including information on data encryption, whether an app follows Google’s families policy, and whether users will have a choice to share data.

The safety section is currently due to start appearing in app descriptions in the first quarter of 2022.

Google in a blog post disclosed screenshots of what the safety section might look like. Yet, the company said that the design is subject to change.

There’s also a “see details” option to get more specifics on what collected data is used for, and whether the collection is essential for using the app.

The company highlighted that all apps including Google’s own will be required to provide a privacy policy.

It’s worth mentioning that Apple has required a privacy policy for apps in the App Store since 2018.

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