Stocks skid as tech firms fall, and plunge in oil continues
U.S. stocks fell Friday as a combination of weak economic data from China and disappointing earnings hurt technology and internet companies. Crude oil prices fell for the 10th day in a row.
Auto sales in China fell in October for the fourth consecutive month and are down 13% yearover year, the latest sign its economy is under pressure. Concerns about China’s economy and its trade dispute with the United States contributed to the global stock market skid in October. The stocks that fared the worst during that time included tech and internet companies and retailers, which all took sharp losses Friday.
“China has played such a critical role in driving global growth,” said Kristina Hooper, chief global market strategist for Invesco. Investors “are having concerns that these tariff wars are essentially going to kick China when it’s down.”
U.S. crude oil slipped 0.8% to extend its losing streak. It has fallen five weeks in a row and tumbled 21% since Oct. 3. Energy companies’ stocks have suffered steep losses during that time.
Weak forecasts from firms including video game company Activision Blizzard and chipmaker Skyworks Solutions also contributed to Friday’s decline.
The Standard & Poor’s 500 index fell 25.82 points, or 0.9%, to 2,781.01. It gained 2.1% this week, and it would need to rise an additional 5.4% to reach the all-time high it set Sept. 20.
The Dow Jones industrial average fell 201.92 points, or 0.8%, to 25,989.30. The Nasdaq composite slid 123.98 points, or 1.6%, to 7,406.90. The Russell 2000 index of smaller firms dropped 28.72 points, or 1.8%, to 1,549.49.
The Labor Department said wholesale prices in the United States jumped, and Hooper said that could be linked to the tariff dispute as well.
Activision Blizzard tumbled 12.4% to $55.01 after its forecast for the holiday season fell short of analysts’ projections. Electronic Arts slid 5.3% to $88.89.
Major tech and internet companies faltered. Apple fell 1.9% to $204.47. Facebook fell 2% to $144.96. Amazon slid 2.4% to $1,712.43.
Benchmark U.S. crude fell to $60.19 a barrel, its lowest price in almost eight months. Brent crude, used to price international oils, has fared almost as badly as U.S. crude, and Friday it declined 0.7% to $70.20 a barrel in London.
West Coast utility companies tumbled as wildfires worsened in Southern California. PG&E dived 16.5% to $39.92. Edison International skidded 12.1% to $61.
General Electric declined 5.7% to $8.58 after a JPMorgan Chase analyst cut his price target on the stock to $6 a share from $10.
Bond prices rose. The yield on the 10-year Treasury note fell to 3.18% from 3.23%.
Disney rose 1.7% to $118 after posting earnings that were better than expected, bolstered by revenue from movies including “Avengers: Infinity War,” “Incredibles 2” and “Ant-Man and the Wasp.”
Online reviews company Yelp nosedived 26.6% to $31.93 after it posted weak third-quarter revenue and its forecast for the fourth quarter also fell short of Wall Street’s estimates. The company said part of the problem is an advertising model that is intended to encourage advertisers to try the site without signing a long-term contract. Yelp said that has made its results more sensitive to short-term problems.
Natural gas prices jumped 5% to $3.72 per 1,000 cubic feet. That helped gas companies stem their losses. Heating oil was flat at $2.17 a gallon. Wholesale gasoline fell 1.4% to $1.62 a gallon.