- POSTED: 26 Jul 2014 05:58
US stocks tumbled on Friday (25 July) on disappointing earnings reports from Amazon and some other companies in a move that some analysts also attributed to profit taking.
NEW YORK: US stocks tumbled on Friday (25 July) on disappointing earnings reports from Amazon and some other companies in a move that some analysts also attributed to profit taking.
The Dow Jones Industrial Average fell 123.23 points (0.72 per cent) to 16,960.57.
The broad-based S&P 500 dropped 9.64 (0.48 per cent) to 1,978.34, snapping two days of record-high closes, while the tech-rich Nasdaq Composite Index lost 22.54 (0.50 per cent) at 4,449.56.
Earnings from Amazon, Visa and Starbucks raised worries about consumer spending, said Michael James, managing director of equity trading at Wedbush Securities.
Amazon (-9.7 per cent) reported a US$126 million loss for the second quarter, while Starbucks (-2.1 per cent) and Dow member Visa (-3.6 per cent) gave lacklustre outlooks for 2014.
"The sell-off is earnings- and sentiment-related," James said.
"Markets had a good little move and people are poised to take some profits off the table, especially given the weakness that came from Europe."
Equity markets in Britain (-0.44 per cent), France (-1.82 per cent) and Germany (-1.53 per cent) all fell after the IFO economic institute's index of German business confidence dropped sharply to 108.0 points in July from 109.7 points in June, blamed on anxiety over violence in Ukraine and the Middle East.
Drugmaker AbbVie fell 1.7 per cent despite reporting earnings of 82 cents per share, better than the 76 cents projected by analysts. Sales of rheumatoid-arthritis medication Humira rose 26.2 per cent.
Pandora Media plummeted 10.3 per cent on a disappointing earnings forecast. The online music service expects to earn between five cents and eight cents per share in the upcoming quarter, whereas analysts projected eight cents.
Chemical company LyondellBasell gained 5.0 per cent as second-quarter earnings jumped 26.9 per cent to US$1.2 billion.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.47 per cent from 2.51 per cent Thursday, while the 30-year dropped to 3.24 per cent from 3.30 per cent. Bond prices and yields move inversely.