£250bn wiped off Amazon in six-day losing streak
SHARES in Amazon fell for a sixth day in a row as investors fretted over a sharp slowdown in business in the final three months of the year.
The stock closed down another 4.82pc last night in New York – taking losses since last Wednesday to 23pc. The rout has wiped £250bn off the value of the US technology giant and more than £24bn off the fortune of founder and top shareholder Jeff Bezos.
Amazon shares are now at their lowest level since the first Covid lockdown and the company is once again valued at under $1trillion (£870bn). At its peak last year, it was worth close to double this.
Tech stocks have been hammered this year as soaring inflation, rising interest rates and a darkening outlook for the global economy called into question their sky-high valuations.
Amazon’s sell- off accelerated last week when it warned sales in the crucial final quarter, which includes Christmas, would be far lower than expected, though still at a whopping £121bn to £128bn.
It also said profit over the period could drop to zero from £12bn a year earlier.
As the Federal Reserve raised US interest rates again last night, by 0.75 percentage points, the Dow Jones Industrial Average fell 1.55pc, the S&P 500 2.5pc and the Nasdaq 3.36pc.
Back in London, the FTSE 100 was down 0.6pc, or 42.02 points, to 7144.14 and the FTSE 250 gained 0.1pc, or 21.85 points, to 18217.75.
And shares in paper and packaging firms took a hit after Smurfit Kappa warned of a slowdown in demand over the summer.
The FTSE 100 company, which makes boxes and packaging for the likes of Unilever and Nestle, said volumes fell 3pc in the three months to the end of September. It blamed inflation, the Ukraine war and shifting consumer demand.
The company offset some of the demand fall with price rises of up to 3pc. It was an otherwise solid set of group results with revenue up 33pc to £8.34bn in the nine months to September while profit soared 43pc to £1.54bn.
Smurfit said its profit for the year should be close to £2bn. But shares sank – with Smurfit Kappa down 2.3pc, or 66p, to 2833p, while Mondi fell 1.35pc, or 20p, to 1459p and DS Smith dropped 1.9pc, or 5.5p, to 286.40p.
British American Tobacco, the maker of Pall Mall cigarettes, sank 5.51pc, or 191p, to 3274p after Goldman Sachs lowered its rating to ‘neutral’ from ‘buy’ and cut the target price to 3800p from 4050p.
Shares in Metro Bank rose 13.46pc, or 9.80p, to 82.60p after it said it returned to profit in September and has not seen borrowers struggling with repayments amid the cost of living crisis.
Weir Group inched up 1.79pc, or 28.50p, to 1620.50p on the news it remained on track to grow its revenue and profit for the year. The Glasgow-based engineering firm said its orders rose 19pc in the three months to September.
Meanwhile Foxtons, the estate agent, rose 3.33pc, or 1p, to 31p after it launched a share buyback programme worth up to £3m.
While the economic turmoil and rising inflation has been ‘challenging’ for Morgan Sindall, the construction group said its ‘sizeable and high-quality workload’ meant it is on track to meet expectations. Orders rose 3pc to £8.8bn at the end of September.
But shares fell 4.06pc, or 64p, to 1514p after Peel Hunt cut the company’s target price to 2200p.
Over at Hiscox, the Lloyd’s of London insurer gained 5.92pc, or 53.20p, to 951.60p after its Re & ILS business saw its written premiums surpass the billion dollar mark thanks to favourable market conditions. Across Hiscox as a whole, the amount of premiums written up increased 6.3pc to £3.2bn in the nine months to September.