Stocks sag fol­low­ing dis­ap­point­ing profit re­ports

Miami Herald - - FRONT PAGE -

NEW YORK — Stock mar­kets around the world sagged on Fri­day af­ter Ama­zon and other big com­pa­nies re­ported quar­terly re­sults that un­der­whelmed in­vestors.

The Stan­dard & Poor’s 500 in­dex lost 3.32 points, or 0.1 per­cent, to 2,472.10 and closed a week packed with cor­po­rate earn­ings re­ports al­most ex­actly where it started. It set a record dur­ing the mid­dle of it.

The Dow Jones in­dus­trial av­er­age gained 33.76 points, or 0.2 per­cent, to 21,830.31 and set an­other all-time high. The Nas­daq com­pos­ite fell 7.51, or 0.1 per­cent, to 6,374.68.

A lit­tle more than half the com­pa­nies in the S&P 500 have now shown how much profit they made dur­ing the spring, and the re­sults have been mostly en­cour­ag­ing. Earn­ings for the in­dex are on pace to be about 9 per­cent higher than a year ear­lier, ac­cord­ing to Fac­tSet. But ex­pec­ta­tions were high com­ing into the re­port­ing sea­son, and the few com­pa­nies that fell short of fore­casts have seen their stock prices pun­ished.

Earn­ings re­ports were the main fo­cus for mar­kets dur­ing a busy week, where the Fed­eral Re­serve also de­cided on Wed­nes­day to hold in­ter­est rates steady and the govern­ment on Fri­day gave an up­date on the econ­omy’s health.

The econ­omy grew at an an­nual rate of 2.6 per­cent in the sec­ond quar­ter, revved up by a rise in con­sumer spend­ing, the Com­merce Depart­ment said. Last quar­ter’s growth rate was more than dou­ble that of the year’s first quar­ter, which was re­vised down to 1.2 per­cent.

Ex­cite­ment about the U.S. econ­omy had been higher ear­lier in the year, when many in­vestors ex­pected the Repub­li­can takeover of Wash­ing­ton to lead to more pro-busi­ness poli­cies. But in­ac­tion in the Capi­tol, capped by the Se­nate’s lat­est failed at­tempt to re­vamp the na­tion’s health care sys­tem, is rais­ing doubts about whether tax re­form or a big in­fra­struc­ture plan will hap­pen.

To­bacco stocks were some of Fri­day’s worst per­form­ers af­ter the U.S. govern­ment said it’s con­sid­er­ing lim­it­ing the amount of nico­tine in cig­a­rettes so that they’re no longer ad­dic­tive.

The yield on the 10-year Trea­sury note fell to 2.28 per­cent from 2.32 per­cent late Thurs­day. The two-year yield dipped to 1.34 per­cent from 1.36 per­cent, and the 30-year yield dropped to 2.90 per­cent from 2.93 per­cent.

Stock mar­kets around the world were weak. Ja­pan’s Nikkei 225 in­dex dropped 0.6 per­cent, South Korea’s Kospi lost 1.7 per­cent and the Hang Seng in Hong Kong fell 0.6 per­cent.

France’s CAC 40 lost 1.1 per­cent, the FTSE 100 in Lon­don fell 1 per­cent and Ger­many’s DAX dropped 0.4 per­cent

The dol­lar fell to 110.60 Ja­panese yen from 111.09 yen late Thurs­day. The euro rose to $1.1760 from $1.1681, and the Bri­tish pound rose to $1.3149 from $1.3070.

The price of oil capped off its best week since early De­cem­ber with an­other gain. Bench­mark U.S. crude rose 67 cents to set­tle at $49.71 per barrel and touched its high­est level since May. Oil gained nearly 9 per­cent over the week.

Brent crude gained $1.03 to $53.53 a barrel Fri­day. Nat­u­ral gas fell 3 cents to $2.94 per 1,000 cu­bic feet.

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