Alphabet Stock Drags US Market Lower   10/29 09:38

   A potentially historic drop for Alphabet's stock is dragging 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.

   NEW YORK (AP) -- A potentially historic drop for Alphabet's stock is 
dragging 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 0.4% and was on track for its first loss in four days, 
while the Nasdaq composite tumbled 1.4%. Most of the rest of the stocks on Wall 
Street were rising, though, and the Dow Jones Industrial Average was down a 
more modest 0.3%, or 162 points, as of 10:15 a.m. Eastern time.

   Alphabet is one of the most influential stocks on Wall Street because it's 
one of the largest, and its 12.5% drop was on track to be its worst since it 
began trading more than 20 years ago. It was under heavy 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.

   Such 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 is also under pressure because of how expensive it's become to 
borrow money.

   If not for Alphabet's drop, the S&P 500 would have been higher for the day.

   Several companies rallied after reporting stronger profits for the summer 
than analysts expected, including KLA Corp. The company, whose equipment helps 
make semiconductors, rose 6.8%.

   Eli Lilly climbed 7.8%, Mastercard rose 4.9% and Merck added 4.6%.

   Outside of earnings reports, DoorDash rose 6% after saying it agreed to buy 
Instacart for $65 per share. Separately, DoorDash also reported profit and 
revenue for the latest quarter that topped analysts' expectations.

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

   The overall economy's growth may have accelerated by more during the summer 
than economists expected, according to a preliminary reading thanks to spending 
by U.S. consumers and businesses investing in AI. But other reports said 
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 
4.98% from 5.05% late Wednesday. It's back to where it was early Wednesday, 
before traders began interpreting the latest messages from the Federal Reserve 
as potential signals that it may pare back on hikes to interest rates to keep a 
lid on inflation.

   Helping to pull yields lower was a drop in oil prices. The price for a 
barrel of Brent crude oil sank 1.2% to $110.31.

   In stock markets abroad, indexes rose in Europe following a mixed finish in 
Asia.

   South Korea's Kospi fell 1.2% due to a drop for market heavyweight Samsung 
Electronics. It sank 4.1% even though it reported a big jump in profit.