Early on, it looked as though the stock market might have a solid day on Thursday, with the Dow Jones Industrial Average (^DJI 0.17%), Nasdaq Composite (^IXIC 0.22%), and S&P 500 (^GSPC 0.25%) all posting sizable advances. However, bond yields rose to levels not seen in well over a decade, and that spooked stock investors. All three major indexes closed the session lower.


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Data source: Yahoo! Finance.

Wall Street is headed for the height of this earnings season, and a couple of key companies Thursday weren't able to give investors the good news they so desperately wanted. Both Snap (SNAP -4.87%) and SVB Financial (SIVB.Q 9.09%) have substantial followings in the investing community, but both saw their shares decline sharply after they announced their latest quarterly results.

Snap loses its pop

Shares of Snap fell by more than 25% in after-hours trading late Thursday, dropping to multiyear lows following a disappointing third-quarter report.

Snap's numbers showed the headwinds hitting the social media company right now. The company saw a modest year-over-year sales gain of 6%, bringing revenue to $1.13 billion. However, its net losses quintupled from year-ago levels, and even after allowing for typical accounting adjustments, its earnings of $0.08 per share were down by more than half. Free cash flow figures also fell sharply from where they were 12 months ago.

Snap tried to accentuate the positives. Daily active users were up 57 million to 363 million at the quarter's end, and it had some favorable metrics for its Spotlight and Shows features. However, the company chose not to offer specific financial guidance for the fourth quarter, leaving shareholders in the dark about what the future could bring for the Snapchat operator.

But what investors reacted to the most were comments saying that some of Snap's advertisers had cut back on their marketing budgets. Moreover, it is expected that the company's operating conditions will remain under pressure at least through the end of the year, and Snap does not seem ready to endure a prolonged economic downturn if one comes.

SVB deals with a Silicon Valley slowdown

In the financial sector, SVB Financial also struggled -- its shares fell 13% after the closing bell. The banking institution operates in proximity to Silicon Valley's biggest companies, and its third-quarter results reflected the difficulties facing the tech sector.

Interestingly, SVB's quarterly results weren't bad on their face. Net income  jumped nearly 18% year over year to $429 million, working out to $7.21 per share. Loans at the end of the quarter were up $1.2 billion over the past three months to $72.1 billion, while net interest income inched higher by 2.5% to $1.2 billion. Charge-offs on loans remained relatively low at $15 million, and SVB set aside just $72 million as a provision for credit losses.

However, SVB saw deterioration in some key metrics. Fixed-income investment securities were down slightly, while total client funds as of the quarter's end sat at $353.7 billion, down 6.7%. Private assets under management were down more than $650 million to $15.9 billion, and higher non-interest expenses caused SVB's efficiency ratio to worsen by nearly 2 percentage points to 57.3%.

SVB also reduced its full-year 2022 outlook in a couple of areas, including average deposit balances and net interest income growth. Given that those growth rates remain robust, it would be tempting to conclude that the bank stock's sizable drop late Thursday was an overreaction. However, given the uncertainty about the future economic climate, it's clear that some investors are inclined to be overly cautious.