Wall Street’s major indices fell on Friday as weak earnings reports from major technology companies led to a big drop for the sector.
Intel Corp shares sank 8.6 percent after the chipmaker’s data center business missed estimates amid stiff rivalry from Advanced Micro Devices Inc, whose shares rose 3.2 percent.
Twitter Inc shares plunged 20.5 percent after the social media network reported a decline in monthly active users, versus the increase analysts had expected, and warned of further drops as it deletes phony accounts.
The S&P 500 technology index fell 2 percent, the most among the major S&P sectors.
Shares of Apple Inc, which is set to report quarterly results on Tuesday, fell 1.7 percent.
Shares of Microsoft Corp and Alphabet Inc, which had soared after both companies recently reported strong quarterly results, dropped 1.8 percent and 2.5 percent respectively.
Alphabet shares touched an all-time high earlier in the session, but reversed course.
The pressure on tech stocks started on Thursday after Facebook Inc gave a dismal forecast that caught investors off guard about growth prospects in a sector that has led the market’s march toward record highs.
“There’s a bit of concern perhaps growing that the bloom’s off the rose for these tech stocks, that they are not invincible,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
The Dow Jones Industrial Average on Friday fell 76.01 points, or 0.3 percent, to 25,451.06, the S&P 500 lost 18.62 points, or 0.66 percent, to 2,818.82 and the NASDAQ Composite dropped 114.77 points, or 1.46 percent, to 7,737.42.
The NASDAQ exceeded Thursday’s losses to register its biggest daily percentage drop in a month.
For the week, the NASDAQ shed 1.06 percent, but the S&P rose 0.61 percent.
The Dow, cushioned by promising developments in trade relations between the US and the EU earlier this week, added 1.57 percent.
Intel and Twitter’s disappointing results overshadowed data from the US Department of Commerce showing the US economy grew at a 4.1 percent annualized rate in the second quarter of this year, its fastest pace in nearly four years, on higher consumer spending and farmers rushing soybean shipments to China to beat tariffs.
Economists and investors cautioned against putting too much weight on the growth, which matched expectations, as the trade-related boost is expected to unwind later this year.
“It’s old news,” Ghriskey said. “Trade is bound to have an impact on the coming quarters if the tariff issue isn’t resolved.”
AbbVie Inc shares fell 3.6 percent after sales of its Humira drug in the second quarter barely beat Wall Street views, raising concerns about the drug’s viability as a cash cow.
Amazon.com Inc shares jumped as much as 4 percent to a record high of US$1,880.05 after the e-commerce giant forecast strong sales and posted a profit that was double analysts’ estimates. Amazon shares closed up 0.5 percent.
Declining issues outnumbered advancing ones on the New York Stock Exchange by a 2.03-to-1 ratio; on NASDAQ, a 3.39-to-1 ratio favored decliners.
The S&P 500 posted 25 new 52-week highs and three new lows; the NASDAQ Composite recorded 63 new highs and 99 new lows.
Volume on US exchanges was 6.81 billion shares, compared with the 6.04 billion average over the past 20 trading days.
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