In this Nov. 16, 2020 file photo a man wearing a mask passes the New York Stock Exchange in New York. (AP Photo/Mark Lennihan, File)
By Damian J. Troise and Stan Choe
U.S. stock indexes fell Friday, with much of the downward weight coming from a stumble for high-flying Amazon.
The S&P 500 lost 23.89, or 0.5%, to 4,395.26. But it nevertheless wrapped up its sixth straight month of gains, its longest such streak since 2018, and it's still within 0.6% of its record high set on Monday.
The Dow Jones Industrial Average fell 149.06, or 0.4%, to 34,935.47, and the Nasdaq composite dropped 105.59, or 0.7%, to 14,672.68.
Trading was mixed on Friday, with close to two stocks falling in the S&P 500 for every one that rose. Losses for banks and energy producers offset some modest gains for real-estate companies and raw-material producers.
Amazon dropped 7.6% after it reported sales growth for its latest quarter that, while still enviable at 27%, wasn’t as strong as analysts expected. It also gave a forecast for revenue in the current quarter that fell short of Wall Street’s.
Because Amazon is one of the biggest companies in the S&P 500, its stock movements carry extra weight on the index. It alone accounted for more than half of Friday's drop for the S&P 500.
Amazon was one of the biggest winners of the pandemic, which forced people to hunker down and shop from home. But people have been returning to stores and other pre-pandemic activities.
Digital pinboard and shopping tool company Pinterest ran into a similar issue during its latest quarter. Its stock slumped 18.2% after it reported slower growth than expected for its number of users.
It's been a busy week for earnings reports from companies, and roughly three out of five in the S&P 500 have now detailed their performance for the spring, according to FactSet. Profits so far have been blowing past the already lofty expectations Wall Street had set.
Perhaps even more important is how companies are doing it, said Sal Bruno, chief investment officer at IndexIQ.
“What's really encouraging is that the sales surprise is trending positive,” he said. “That tells me that companies are growing, which goes along with the economic reopening.”
So far, 88% of companies have reported even bigger sales for the latest quarter than analysts expected, according to FactSet. That's more than usual.
The strong earnings reports have helped to support the stock market, even as other worries have made trading more unsteady recently. Concerns are rising about whether a new variant of the coronavirus may dent the economy, while a crackdown by Beijing on Chinese tech companies has helped unsettle investors around the world. High inflation also remains a risk hanging over the market.
Treasury yields pulled lower following a spate of reports on the economy and inflation.
One showed that spending by consumers, which makes up the bulk of the economy, strengthened by more than economists expected in June. A key measure of inflation also accelerated to its fastest pace since 1991, but it wasn't quite as high as economists thought it would be.
Incomes unexpectedly rose for Americans in June, while their expectations for inflation were slightly lower than economists had forecast.
The yield on the 10-year Treasury fell to 1.23% from 1.27% late Thursday.
The market could be in for more choppy trading through August, Bruno said.
“The fundamental outlook is generally pretty strong going forward, even if there is some shorter term weakness and volatility," he said.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
U.S. sports betting is booming as NFL and college football fuel massive activity. BetMGM CEO Adam Greenblatt breaks down trends, growth, and what’s next.
President Donald Trump says a deal struck by Netflix last week to buy Warner Bros. Discovery “could be a problem” because of the size of the combined market share. The Republican president says he will be involved in the decision about whether federal regulators should approve the deal. Trump commented Sunday when he was asked about the deal as he walked the red carpet at the Kennedy Center Honors. The $72 billion deal would bring together two of the biggest players in television and film and potentially reshape the entertainment industry.
Disney's changes to a program for disabled visitors are facing challenges in federal court and through a shareholder proposal. The Disability Access Service program, which allows disabled visitors to skip long lines, was overhauled last year. Disney now mostly limits the program to those with developmental disabilities like autism who have difficulty waiting in lines. The changes have sparked criticism from some disability advocates. A shareholder proposal submitted by disability advocates calls for an independent review of Disney's disability policies. Disney plans to block this proposal, claiming it's misleading. It's the latest struggle by Disney to accommodate disabled visitors while stopping past abuses by some theme park guests.
With a merger this big, creators, studios, and theaters all face uncertain futures. Here’s what experts are worried about and what good could come from it.
With disengagement rising and hybrid work shifting, 'Everybody Matters' author Bob Chapman explains why treating people well could define the future of work.
We sat down with Ali Furman, U.S. Consumer Markets Industry Leader at consulting firm PwC to ask what trends she garnered from the initial data this year.
