Japanese bonds hold steady as two-year auction demand strengthens
The auction’s bid-to-cover ratio rose to 4.03 from 3.89 at the previous month’s sale, ahead of the Bank of Japan’s policy decision.
Fortinet and ServiceNow lead software stock declines after results
Fortinet fell 26% and ServiceNow dropped 18.5% in premarket trading, with losses spreading to other software companies.
Software shares fell before the market opened on October 29 after results from Fortinet and ServiceNow disappointed investors, despite both companies raising annual forecasts. The declines came amid investor concerns that newer artificial intelligence models could disrupt traditional software businesses.
Fortinet dropped 26%, making it the biggest decliner in the S&P 500. Although the company increased its expectations for annual results, analysts highlighted slowing revenue growth in its services business. Its shares had gained 119% this year, leaving the company facing high expectations.
ServiceNow lost 18.5% after third-quarter profit fell short of expectations, overshadowing higher full-year forecasts for subscription revenue and cash flow margin. Raymond James analysts cited sluggish growth in subscription revenue and backlog, while saying the company's AI initiatives had yet to materialize.
The selling extended to peers: Salesforce declined 5.4%, Palo Alto Networks fell 6.5%, Atlassian dropped 7% and Zscaler lost 5.8%. The S&P 500 Software & Services Index has risen 6% this year, roughly half the gain of the broader S&P 500.