Stocks fall despite blowout gains from Amazon, Dow falls 250 points
Trader on the New York Stock Exchange
Key averages fell on Friday as investors pondered a flurry of earnings results and a robust profit blow from e-commerce giant Amazon.
The S&P 500 fell 0.5% while the Dow Jones Industrial Average lost around 200 points. Nasdaq Composite fell about 0.3%.
Amazon, the last Wall Street mega-cap tech company to release results, posted record earnings in the first quarter. The Seattle-based company announced that profits more than tripled to $ 8.1 billion and sales grew 44% to $ 108 billion from January to March. The results exceeded Wall Street’s expectations as the company turned in profits $ 15.79 per share versus consensus estimate of $ 9.54.
Amazon’s results showed that demand for its massive online retail business remained strong, even as the economy gradually opened up. Shares rose 1.5%, but that wasn’t enough to lift sentiment for the entire market.
Apple came under slight pressure in the pre-market after the European Union announced that the company’s App Store was violating its competition rules. The shares fell 0.7%.
Exxon Mobil and Chevron both traded lower after reporting on the bell. Chevron stocks fell after quarterly EPS failed to beat expectations.
Friday’s equity weakness could jeopardize top averages earnings week. The Dow has been in the red since Monday. However, the S&P 500 is still in the green for the week after closing at record levels on Thursday following results from Apple and Facebook. The Nasdaq is up 0.2% this week.
Spending in March rose 4.2% better than expected. Personal income rose massively by 21.1% due to further fiscal incentives.
The PCE price index for March rose by 0.5% compared to the previous month and by 2.3% compared to the previous year. Core PCE excluding food and energy rose 0.4% in March and 1.8% year over year. The PCE inflation metric is being closely monitored by the Federal Reserve, and Chairman Jerome Powell warned earlier this week that prices could rise temporarily.
Inflation numbers apparently weren’t as high as feared as the 10-year return remained unchanged after the numbers were released.
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