Tue. Sep 21st, 2021

NEWS ABOUT RELAXATION

The Real News Network

Wall Street falls as Amazon earnings disappoint

3 min read

(Reuters) -Wall Street’s main indexes fell on Friday following a glum quarterly earnings report from Amazon.com, while data showing a strong rise in June consumer spending reinforced optimism about a steady economic rebound.

FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri

Amazon.com Inc sank 6.9%, tracking its worst day since March 2020, after the company said sales growth would slow in the next few quarters as customers ventured more outside the home.

Shares of other technology behemoths, including Apple Inc, Google-parent Alphabet Inc, and Facebook Inc, which benefited last year from people staying indoors due to the COVID-19 curbs, fell between 0.6% and 1.8%.

The S&P real estate index, generally considered a defensive play, hit an all-time intra-day high.

“Expectations across the board were quite high for corporate earnings and the reason we are seeing some of the shares drop despite positive results is because people expect exponential growth, which, to be honest, is too high to expect,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab.

By 12:06 p.m. ET, the Dow Jones Industrial Average was down 0.39%, the S&P 500 was down 0.53% and the Nasdaq Composite was down 0.68%.

Hopes of a steady post-pandemic rebound in the U.S. economy have put the benchmark index on course for its sixth straight monthly gain, but the rapid spread of the Delta variant and rising inflation have kept sentiment in check.

Data on Friday showed U.S. consumer spending rose more than expected in June, although annual inflation accelerated further above the Federal Reserve’s 2% target.

Economically-sensitive stocks including industrials, energy and financials fell, but for the week, the so-called value stocks were set to outperform growth-linked stocks such as technology.

“We are bullish about cyclicals and consumer spending,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

“Cyclical sectors are likely to continue to expand and consumer spending is going to increase. Restaurants and specialty retail are two areas for which we have a pretty optimistic scenario.”

Pampers-maker Procter & Gamble Co rose 2.8% as it forecast higher core earnings for this year, while U.S.-listed shares of Canada’s Restaurant Brands International Inc jumped 4.7% after the Burger King-owner beat estimates for quarterly profit.

Pinterest Inc, however, plunged 19.2% to its lowest in more than two months after saying U.S. user growth was decelerating as people who used the platform for crafts and DIY projects during the height of the pandemic were stepping out more.

Caterpillar Inc reversed course to fall 3.8%. The company posted a rise in second-quarter adjusted profit on the back of a recovery in global economic activity.

Overall, second-quarter results have come in from about half of the S&P 500 companies, of which nearly 91% have beaten profit estimates, according to Refinitiv data.

Declining issues outnumbered advancers 1.48-to-1 on the NYSE and 1.43-to-1 on the Nasdaq.

The S&P index recorded 56 new 52-week highs and one new low, while the Nasdaq recorded 67 new highs and 61 new lows.

Source: Read Full Article