Wall Street ended lower on Friday, with Amazon.com Inc, Apple Inc, Alphabet Inc and other tech-related companies weighing on the S&P 500 and NASDAQ Composite, despite recent strong quarterly earnings reports.
A day after the S&P 500 closed at a record high, Apple, Google-parent Alphabet and Facebook Inc each gave back gains following upbeat quarterly reports this week.
Amazon ended down 0.1 percent after it posted record profit late on Thursday and signaled that consumers would keep spending in a growing US economy. Amazon had been up more than 2 percent earlier in the session.
Twitter Inc plunged 15 percent after it offered a tepid revenue forecast for the second quarter of this year, saying user growth could slow as the boost seen during the COVID-19 pandemic fizzles.
While mega-cap favorites posted largely strong earnings in the first quarter, their shares have struggled to maintain the upward trajectory that many had coming into reporting season.
“There is a sense that maybe next quarter is as good as it’s going to get, and we’re going to roll over, particularly among the NASDAQ stocks and Big Tech stocks that benefited from the pandemic,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Palm Beach, Florida.
Seven of the 11 major S&P 500 sector indices fell, with technology and materials down more than 1 percent, and energy falling almost 3 percent.
Of the 303 companies in the S&P 500 that have reported so far, 87 percent have topped analysts’ earnings estimates, with Refinitiv IBES data predicting a 46 percent jump in profit growth.
Data on Friday showed that US consumer spending rebounded in March amid a surge in income as households received additional COVID-19 pandemic relief money from the government.
The Dow Jones Industrial Average on Friday fell 0.54 percent to end at 33,874.85 points, while the S&P 500 lost 0.72 percent to 4,181.17.
The NASDAQ Composite dropped 0.85 percent to 13,962.68.
Despite Friday’s weakness, the NASDAQ completed its sixth consecutive month of gains, rising 5.4 percent last month. The Dow added 2.7 percent last month while the S&P 500 rose 5.2 percent, both gaining for a third month in a row.
For the week, the S&P 500 was about flat, the Dow lost 0.5 percent and the NASDAQ shed 0.4 percent.
Chevron Corp dropped 3.6 percent after its first-quarter profit fell 29 percent, hit by weaker refining margins and production losses.
AbbVie Inc rose 0.5 percent after it reported strong results and raised its earnings forecast for this year, helped by demand for its rheumatoid arthritis drug in the US.
Declining issues outnumbered advancing ones on the New York Stock Exchange by a 2.13-to-1 ratio; on NASDAQ, a 2.13-to-1 ratio favored decliners.
The S&P 500 posted 52 new 52-week highs and no new lows; the NASDAQ Composite recorded 84 new highs and 45 new lows.
Volume on US exchanges was 10.3 billion shares, compared with the 9.8 billion full-session average over the past 20 trading days.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
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