Stocks sag following disappointing profit reports
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.
Amazon dropped $25.96, or 2.5 percent, to $1,020.04 after its 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, 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 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.
Altria Group, which sells Marlboro and other cigarettes in the U.S., fell $7.02, or 9.5 percent to $66.94.
Starbucks fell $5.50, or 9.2 percent, to $54.00 after it lowered its forecast for earnings this fiscal year, and Goodyear Tire & Rubber sank $2.97, or 8.4 percent, to $32.51 after it gave a forecast for 2017 operating income that fell short of analysts’ expectations.
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, the international standard, gained $1.03 to $53.53 a barrel Friday. Natural gas fell 3 cents to $2.94 per 1,000 cubic feet.