US stocks tumbled on Friday to weather a week of volatile trading as investors reacted to weak earnings reports from blue-chip tech companies and worrying economic data.
The Dow Jones Industrial Average plunged 939.18 points, or 2.77%. The tech-heavy Nasdaq index fell 536.89 points, or 4.17%, and the broad-based S&P 500 fell 155.62 points, or 3.6%.
The poor performance of large tech companies with trillion-dollar valuations has been a major drag on the Nasdaq — with Amazon and Apple each providing bad news for investors.
Concerns about renewed COVID-19 lockdowns in China and the looming possibility of a recession added further pain to the market.
Amazon ended the day 14% lower after the e-commerce giant reported its first quarterly loss in seven years and issued a weak sales guidance for the coming quarter. The stock posted its worst day since 2006, leaving the company’s shares near a two-year low.
Apple shares also slumped nearly 4% after the iPhone maker warned that supply chain issues could hurt sales by a whopping $4 billion to $8 billion in the current quarter.
All 11 S&P 500 sector indices traded lower. The Nasdaq lost about 13% in April — its worst monthly performance since the Great Recession.
“Market participants are nervous initially, so there’s a quick trigger with these names when there’s uncertainty,” Keith Buchanan, senior portfolio manager at Globalt Investments in Atlanta, told Reuters.
“When assumptions about the growth of these companies don’t hold true, there’s definitely a ‘shoot first, ask questions later’ mentality,” he added.
The likelihood of aggressive action by the Federal Reserve to combat rising inflation has weighed on stocks for weeks.
Fed Chair Jerome Powell has hinted that the central bank could raise interest rates next month by more than the quarter-point hike decided in March.
The consumer spending index — the Fed’s preferred measure of inflation — rose 0.9% in March alone and is up 6.6% year-on-year.
That comes after the consumer price index rose 8.5% earlier this month – the steepest rate since 1981.
Investors also digested a surprise decline in US gross domestic product, which fell 1.4% in the first quarter, despite economists’ expectations.
This news was announced at a time when concerns were mounting that the US economy was headed for recession in the coming months.
Equities are struggling despite outperforming companies this earnings season. According to Refinitiv, around 81% of S&P 500 companies that have reported to date have beaten expectations, better than the historical rate of 66%.
With postal wires
https://nypost.com/2022/04/29/us-stocks-ended-on-a-down-note-friday-after-a-week-of-volatile-trading-as-investors-reacted-to-mixed-earnings-reports-from-blue-chip-tech-firms-and-some-alarming-economic-data/ Fill up stocks like Amazon, Apple worries investors