Amazon pulls stocks mostly lower
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 fell 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.
The Dow Jones industrial average rose 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 have fallen short of forecasts have seen their stock prices punished.
Amazon shares fell $25.96, or 2.5 percent, to $1,020.04 after its second-quarter profit missed expectations. Its forecast for operating income this fiscal year was also below many analysts’ forecasts, though revenue for the latest quarter beat expectations.
Earnings reports were the main focus for markets during a busy week, when 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 reported. Last quarter’s growth rate was more than double that of the year’s first quarter, which was revised down to 1.2 percent. The faster growth, though, was still a shade below the 2.7 percent that economists expected.
“Overall, the economy continues to move along, but it’s hard to see where the fuel is going to come from for further acceleration,” said Rich Weiss, chief investment officer of multiasset strategies at American Century Investments. He says the economy reminds him of what golfers call a “son-in-law” shot, one that’s not bad but not great.
“We’re not throwing new money into the stock market at this point,” Weiss said. Instead of U.S. stocks, he prefers foreign markets where he says economies have more potential for improvement. Many other investors have shifted their money using a similar philosophy, and the falling value of the dollar against other currencies has helped foreign stocks’ returns.
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. Altria Group, which sells Marlboro and other cigarettes in the U.S., fell $7.02, or 9.5 percent to $66.94. It had been down as much as 18.9 percent shortly after the Food and Drug Administration’s announcement.
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.
Brent crude oil, the international standard, rose $1.03 to $53.53 a barrel Friday.