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US-STOCKS-MARKETS
Nasdaq ends with 2.1% loss as US stocks fall amid tech selloff
NEW YORK, Oct 27, 2018 (BSS/AFP) – Wall Street stocks finished a volatile
week on a sour note Friday after disappointing earnings from Amazon and
Google-parent Alphabet sparked a selloff in tech shares.
The tech-rich Nasdaq Composite Index finished with a loss of 2.1 percent
at 7,167.21.
The Dow Jones Industrial Average shed 1.2 percent to end the week at
24,688.31, while the broad-based S&P 500 fell 1.7 percent to 2,658.69, taking
its weekly loss to about 3.5 percent.
The Dow and S&P wiped out all of their gains for the year in this volatile
trading week, which saw markets react to concerns about rising interest
rates, the impact of US trade conflicts as well as geopolitical tension.
Amazon and Alphabet reported big jumps in quarterly profit, but Amazon’s
sales forecast for the critical holiday-shopping quarter disappointed
analysts, and Alphabet’s revenues in the just-finished quarter also lagged
expectations.
Amazon shares plummeted 7.8 percent while Alphabet dropped 2.2 percent.
Other large technology companies also were under pressure: Apple shed 1.6
percent, Facebook 3.7 percent and Netflix 4.2 percent.
“Investors expect companies to be positive on top line, bottom line, and
guidance,” said Quincy Krosby, chief market strategist at Prudential
Financial.
“Companies have to come with all three, otherwise the market is prepared
to sell.”
Among companies in the S&P 500 that have reported earnings, 77 percent
have topped analyst expectations on earnings, according to a Factset report.
There have been 26 companies that have given a negative outlook on fourth
quarter and 15 with a positive outlook, Factset said.
US government data, meanwhile, estimated third-quarter growth at a solid
3.5 percent, below the pace of the prior 4.2 percent quarter but better than
expected, even while some of the components caused concern, including slowing
investment.
The result made for the strongest six-month period since mid-2014 and puts
growth above the prevailing trend for most of the recovery since the Great
Recession, although it is based on preliminary data subject to revision.
But economists say growth should slow in the coming quarters as tax cuts
and fiscal stimulus recede into the past while inflation mounts, interest
rates rise, protectionist trade measures continue to bite and growth slows in
the world’s other major economies.
BSS/AFP/HR/0935