Twitter Falls 7.3% After Whistleblower Speaks Out

Stocks drifted to modest losses in a quiet Tuesday on Wall Street, as steadying Treasury yields helped calm the market following its worst tumble in months. The S&P 500 dipped 9.26 points, or 0.2%, to 4,128.73 after flipping between small gains and losses through the day. The edge lower follows up on Monday’s sharp 2.1% drop, which came on the heels of the first losing week for the index in the last five. The Dow Jones Industrial Average fell 154.02, or 0.5%, to 32,909.59, and the Nasdaq composite slipped 0.27, or less than 0.1%, to 12381.30. Stocks of smaller companies held up better than the rest of the market, and the Russell 2000 index ticked up by 0.2%.

Macy’s rose 3.8% after beating Wall Street's second-quarter expectations. Zoom Video Communications slumped 16.5% after cutting its financial forecast for the year. Twitter fell 7.3% after a whistleblower alleged the company misled regulators about its cybersecurity defenses, privacy protections, and its ability to detect and root out fake accounts. Volatility has returned to Wall Street following what had been a strong summer as worries rise about how aggressively the Federal Reserve will raise interest rates to knock down high inflation, the AP reports. Recent comments from some Fed officials have cooled hopes the Fed may end up less forceful than feared.

The yield on the 10-year Treasury has climbed back above 3% after starting the month close to 2.60%. Yields calmed on Tuesday, though, which helped give stocks something of a reprieve. The two-year yield fell in particular following some weaker-than-forecast readings on the economy, down to 3.28% from 3.33% late Monday. The 10-year yield inched up to 3.05% from 3.03% after preliminary data suggested both the manufacturing and services sectors are weaker than economists expected. A separate report showed that sales of new homes slowed more than economists expected last month. Such weak data on the US economy raises worries that a recession may indeed be on the way, but it also could encourage the Fed to take it easier on rate hikes. (More stock market stories.)