Stocks skid as tech firms fall, and plunge in oil con­tin­ues

Los Angeles Times - - BUSINESS BEAT -

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.

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