Tech stocks take a beating
Nasdaq, Amazon shares drop sharply
The Dow Jones Industrial Average slumped more than 900 points Friday as another sharp sell-off led by technology stocks added to Wall Street’s losses in April, leaving the S&P 500 with its biggest monthly skid since the start of the pandemic.
A sharp drop in Amazon weighed on the market after the internet retail giant posted its first loss since 2015. The decline knocked more than $200 billion off Amazon’s market value.
The benchmark S&P 500 fell 3.6% and finished April with an 8.8% loss, its worst monthly slide since March 2020. The Dow slumped 2.8%.
The Nasdaq composite, heavily weighted with technology stocks, bore the brunt of the damage this month, ending April with a 13.3% loss, its biggest monthly decline since the 2008 financial crisis.
Major indexes shifted between slumps and rallies throughout the week as the latest round of corporate earnings hit the market in force. Investors have been reviewing a particularly heavy batch of financial results from big tech companies, industrial firms and retailers.
But some disappointing results or outlooks from Apple, Google’s parent company and Amazon helped fuel the selling this week.
“When you start to hear from companies saying that perhaps demand is down, the concerns over a deeper slowdown in the economy gains momentum, and that’s where we are,” said Quincy Krosby, chief equity strategist for LPL Financial.
Traders also continue to fret about the tough medicine the Federal Reserve is using in its fight against inflation: higher interest rates. The central bank is expected to announce another round of rate hikes next week.
“Rising cost pressures and uncertain outlooks from the largest technology names have investors agitated going into the weekend and investors are not likely to be comfortable any time soon with the Fed widely expected to deliver a 50-basis point hike along with a hawkish message next week,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.
The S&P 500 fell 155.57 points to 4,131.93 Friday. The benchmark index is now down 13.3% for the year. The
Dow dropped 939.18 points to 32,977.21. The Nasdaq slid 536.89 points to 12,334.64. It’s down 21.2% so far this year.
Smaller company stocks also had a rough day. The Russell 2000 slid 53.84 points, or 2.8%, to 1,864.10.
Internet retail giant Amazon slumped 14%, one of the biggest decliners in the S&P 500, a day after reporting a rare quarterly loss and giving investors a disappointing revenue forecast. The weak update from Amazon comes as Wall Street worries about a potential slowdown in consumer spending along with rising inflation.