Nasdaq ends with 2.1pc loss as US stocks fall amid tech selloff

NEW YORK: Wall Street stocks finished a volatile week on a sour note Friday after disappointing earnings from Amazon and Google-parent Alphabet sparked a selloff in tech shares.

The tech-rich Nasdaq Composite Index finished with a loss of 2.1 percent at 7,167.21.

The Dow Jones Industrial Average shed 1.2 percent to end the week at 24,688.31, while the broad-based S&P 500 fell 1.7 percent to 2,658.69, taking its weekly loss to about 3.5 percent.

The Dow and S&P wiped out all of their gains for the year in this volatile trading week, which saw markets react to concerns about rising interest rates, the impact of US trade conflicts as well as geopolitical tension.

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

Amazon shares plummeted 7.8 percent while Alphabet dropped 2.2 percent.

Other large technology companies also were under pressure: Apple shed 1.6 percent, Facebook 3.7 percent and Netflix 4.2 percent.

“Investors expect companies to be positive on top line, bottom line, and guidance,” said Quincy Krosby, chief market strategist at Prudential Financial.

“Companies have to come with all three, otherwise the market is prepared to sell.”

Among companies in the S&P 500 that have reported earnings, 77 percent have topped analyst expectations on earnings, according to a Factset report.

There have been 26 companies that have given a negative outlook on fourth quarter and 15 with a positive outlook, Factset said.

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, even while some of the components caused concern, including slowing investment.

The result made for the strongest six-month period since mid-2014 and puts growth above the prevailing trend for most of the recovery since the Great Recession, although it is based on preliminary data subject to revision.

But economists say growth should slow in the coming quarters as tax cuts and fiscal stimulus recede into the past while inflation mounts, interest rates rise, protectionist trade measures continue to bite and growth slows in the world’s other major economies.

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