US stocks posted their largest weekly drop in more than two months on Friday as earnings reports continued to weigh, but the S&P 500 and Dow managed to close up for last month after strong showings mid-month.
Corporate results once more gave the market direction as a 9 percent decline in Gilead Sciences shares weighed the most on both the S&P and the NASDAQ Composite.
Apple shares were down for the 10th session in the past 11 and closed the week down 11.3 percent, the largest such decline since January 2013. It dropped 14 percent last month.
Apple and Gilead, alongside Corning, Goodyear and Xerox, were among the companies that reported earnings this week and closed with double-digit declines in their share prices.
“Every sort of case-by-case blowup was handled in a company-specific fashion and lo and behold this week we have stumbled into some household names that kind of rolled the market over with them,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.
The Dow Jones industrial average fell 57.12 points, or 0.32 percent, to 17,773.64; the S&P 500 lost 10.51 points, or 0.51 percent, to 2,065.3; and the NASDAQ Composite dropped 29.93 points, or 0.62 percent, to 4,775.36.
The weekly declines were of 1.3 percent for both the Dow and S&P, and the NASDAQ fell 2.7 percent. It was the largest weekly drop for the Dow since the week to Feb. 12, and for the S&P and NASDAQ the declines were the largest going back to Feb. 5.
Only the NASDAQ ended in negative territory last month.
“Today’s fall is just noise after the massive movement we’ve seen in the past few weeks,” said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute in St Louis, Missouri.
Materials stocks on the S&P 500 fell 0.6 percent on Friday, taking the index down 0.3 percent for the week. However, its gain of 4.9 percent for April adds to advances in February and March that make the three-month increase of more than 20 percent the largest for the sector in any three consecutive months going back to September 2009.
Traders dumped US retail stocks on Friday, with giant Walmart losing 3 percent, after a weak report on US consumer spending added to worries about the strength of the economy.
Coming on the hheels of Thursday’s disappointing US GDP report of just 0.5 percent in the first quarter, the concerns about the world’s largest economy trumped unexpectedly strong eurozone growth data and the tenacious hold of oil prices above US$45 a barrel.
Adding to that, US consumer spending expanded a bare 0.1 percent in March over February, a disappointing picture especially given the strength of job creation and income growth.
Some analysts called the consumer spending downturn a lull and predicted a rebound in the coming months. However, Jay Morelock of FTN Financial said that if US corporate earnings also continue to fall as they have in the first quarter, that could slow hiring and the expansion of household incomes.
“We are keeping an eye on corporate profits as the biggest risk to this forecast,” Morelock said.
The largest retail chain shares, like Target, Costco and Macy’s, all lost more than 2 percent as investors fled the sector.
There were some bright spots in US corporate earnings. Shares of online retail giant Amazon jumped 9.5 percent after it handily beat forecasts in racking up a fourth consecutive profitable quarter. Shares of travel giant Expedia and LinkedIn, the professional online network, also surged after they beat forecasts.
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