Stocks tank as Amazon, Apple reports worry investors

TechnologyStocks tank as Amazon, Apple reports worry investors


US stocks tumbled Friday to cap a week of volatile trading as investors reacted to downbeat earnings reports from blue-chip tech firms and worrisome economic data.

The Dow Jones Industrial Average plummeted 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 sank 155.62 points, or 3.6%.

Poor performance by major tech firms with trillion-dollar valuations were a key 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 more pain for the market.

Amazon finished the day 14% lower after the e-commerce giant reported its first quarterly loss in seven years and provided a weak sales forecast for its upcoming quarter. The stock recorded its worst day since 2006 and left company shares near a two-year low.

Apple shares also dipped nearly 4% after the iPhone maker warned that supply chain woes could hurt sales by a whopping $4 billion to $8 billion in its current quarter.

The Federal Reserve’s plan to hike interest rates has weighed on markets for weeks.
REUTERS

All 11 S&P 500 sector indexes traded lower. The Nasdaq has shed about 13% in April — its worst monthly performance since the Great Recession.

“Market participants are nervous to begin with, so there is a quick trigger when it comes to these names when there’s any uncertainty,” Keith Buchanan, senior portfolio manager at Globalt Investments in Atlanta, told Reuters.

“When assumptions about these companies’ growth fail to materialize, then there’s definitely a ‘shoot first and ask questions later’ mentality,” he added.

The likelihood of aggressive action from the Federal Reserve to combat surging inflation has weighed on stocks for weeks.

Fed Chair Jerome Powell has indicated the central bank could hike its benchmark rate next month at a sharper clip than the quarter-percentage-point increase it enacted in March.

Worried NYSE trader
Investors are concerned about the possibility of a recession.
REUTERS

The personal consumption expenditures price index – the Fed’s preferred measure of inflation – jumped by 0.9% in March alone and is up 6.6% compared to one year earlier.

That came after the Consumer Price Index jumped 8.5% earlier this month – its steepest rate since 1981.

Investors also digested a surprise downturn in U.S. gross domestic product, which declined at a 1.4% pace in the first quarter despite economists’ expectations for a slight gain.

That news was revealed at a time of mounting concern that the US economy is headed for a recession in the months ahead.

Stocks are struggling despite better-than-average performances from companies this earnings season. Some 81% of S&P 500 companies who have reported so far have beat expectations, better than the 66% historic rate, according to Refinitiv.

With Post wires



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