TECH GIANTS’
Alphabet, Amazon tumble; Dow falls 296.24, S&P dips 46.88
earning reports send stocks plunging.
Disappointing earnings reports from the tech giants Amazon and Alphabet set off another turbulent day on Wall Street on Friday, and the benchmark S&P 500 stock market index briefly dipped into a correction before recovering some of those losses.
The latest plunge came at the end of an unusually volatile week of trading that had one huge gain sandwiched between big losses.
A three-week slide has left the S&P 500 on track for its worst month since February 2009, right before the stock market hit bottom following the 2008 financial crisis.
The Dow Jones industrial average fell nearly 300 points and the S&P 500 is now down 9.3 percent from its September peak. That’s just shy of what Wall Street calls a “correction,” or a drop of 10 percent or more from a peak. The last S&P 500 correction happened in February.
The S&P 500 index slid 46.88 points, or 1.7 percent, to 2,658.69.
The Dow dropped 296.24 points, or 1.2 percent, to 24,688.31. The average was briefly down 539 points.
The tech-heavy Nasdaq composite lost 151.12 points, or 2.1 percent, to 7,167.21. The Russell 2000 index of smaller-company stocks gave up 16.58 points, or 1.1 percent, to 1,483.82. The S&P 500 and Dow are now down for the year again.
Longtime market favorites like Amazon led the way lower after reporting weak results. Technology and consumer-focused companies accounted for much of the sell-off.
Media and communications stocks, banks and health care companies also took heavy losses. Bond prices rose, sending yields lower, as investors sought out less risky assets.
The stock market has whipsawed this week, with the Dow slumping 500 points over the first two days of the week, plunging 608 on Wednesday, soaring 401 points Thursday and then plunging again on Friday. The
ups and downs came during the busiest week for thirdquarter company earnings.
“We’re going through this transition where, earlier in the year, the corporate earnings results were just a blowout and now they’re more mixed,” said David Lefkowitz, senior equity strategist for the Americas at UBS Global Wealth Management. “That’s causing some of this volatility.”
Stock trading turned volatile in October after a placid summer, with big sell-offs in the sectors that have powered
the bulk of the gains during the market’s long bull run.
Disappointing quarterly results and outlooks have stoked investors’ jitters over future growth in corporate profits, a key driver of the stock market.
Traders are worried that rising interest rates and the escalating U.S.-China trading dispute could hurt the economy and dampen corporate earnings growth.
“There’s still uncertainty facing equity investors,” said Gary Pollack, managing director at Deutsche Bank Wealth Management. “And the GDP report this morning showed the economy slowing down from the second quarter.”
The Commerce Department said the U.S. economy’s gross domestic product, a measure of total output of goods and services, grew at a robust annual rate of 3.5 percent in the July-September quarter. That’s higher than what many economists had been projecting, but lower than the 4.2 percent rate of growth in the second quarter.
Amazon and Google parent company Alphabet slumped after both companies reported quarterly revenue figures that fell short of analysts’ estimates. Amazon sank 7.8 percent to $1,642.81 while Alphabet fell 1.8 percent to $1,083.75.
Mattel dropped 2.8 percent
to $13.45 after the toy maker served up quarterly results that fell short of analysts’ forecasts.
Colgate-Palmolive lost 6.6 percent to $59.58 after the maker of consumer products didn’t earn as much revenue in the latest quarter as analysts expected.
In a bright spot, chipmaker Intel gained 3.1 percent to $45.69 after it reported strong quarterly results and raised its outlook.
U.S. bond prices rose. The yield on the 10-year Treasury note fell to 3.08 percent from 3.13 percent late Thursday.