US stocks tumble amid tech selloff

US stocks tumble amid tech selloff
Photo: ANI

New York: Wall Street was back in aggressive sell-off mode on Friday, with major stock indices losing more than two percent following disappointing earnings announcements from Amazon and Google parent Alphabet.

Near 1510 GMT, the tech-rich Nasdaq Composite Index was down 3.1 percent at 7,088.58.

The Dow Jones Industrial Average fell 1.8 percent to 24,538.65 after earlier losing more than 2.0 percent, while the broad-based S&P 500 shed 2.4 percent to 2,639.52.

Both Amazon and Alphabet reported big jumps in quarterly profit but Amazon’s sales forecast for the critical holiday-shopping quarter disappointed analysts. Alphabet’s revenues in the just-finished quarter also lagged analyst forecasts.

Amazon plummeted 9.2 percent while Alphabet slumped 4.8 percent.

US government data, meanwhile, estimated third-quarter growth at a solid 3.5 percent, below the pace of the prior 4.2 percent quarter but better than expected.

Friday’s weakness on Wall Street pushed the market back into the red where it has been for much of October, due in part to fears US corporate earnings have peaked following the one-time surge from the 2017 tax cut legislation.

Bill Lynch, director of investments at Hinsdale Associates, noted most of the companies reporting earnings had bested expectations.

“It should be enough to stabilize the markets but the market is more forward-looking,” he said.

Other factors adding to investor unease include uncertainty about the upcoming US midterm elections, fallout from the US trade conflict with China and a budget standoff between Italy and the European Union, Lynch said.

Among other companies reporting results, Colgate-Palmolive slid 5.5 percent after reporting a 13.8 percent drop in third-quarter profits to $523 million due to the strong US dollar and a jump in raw material costs.