Wall Street drops as investors dump Amazon following report

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 4, 2022. REUTERS/Brendan McDermid/File Photo

April 29 (Reuters) – Wall Street tumbled on Friday at the end of a volatile week, as Amazon slumped following a gloomy quarterly report, and as the biggest surge in monthly inflation since 2005 spooked investors already worried about rising interest rates.

Amazon Inc. (AMZN.O)tumbled 14%, on track for its steepest one-day drop since 2006 and leaving the widely-held stock near two-year lows. Late on Thursday, the e-commerce giant delivered a disappointing quarter and outlook, swamped by higher costs to run its warehouses and deliver packages. read more

Apple Inc. (AAPL.O), the world’s most valuable company, dropped 2.2% after its glum outlook overshadowed record quarterly profit and sales. read more

All 11 S&P 500 sector indexes fell, led lower by Consumer Discretionary (.SPLRCD)down 4.4%, followed by a 2.92% loss in Real Estate (.SPLRCR).

Downbeat results and worries about aggressive monetary policy tightening by the Federal Reserve have hammered megacap technology and growth stocks this month.

“Market participants are nervous to begin with, so there is a quick trigger when it comes to these names when there’s any uncertainty,” said Keith Buchanan, senior portfolio manager at Globalt Investments in Atlanta. “When assumptions about these companies’ growth fail to materialize, then there’s definitely a ‘shoot first and ask questions later’ mentality.”

The Nasdaq (.IXIC) has lost about 12% in April, its worst monthly performance since the global financial crisis in 2008.

Year to date, the S&P 500 has lost 12%, marking the index’s worst four-month start of a year since 1942.

Adding to worries on Wall Street, data showed the personal consumption expenditures price index – the Federal Reserve’s favored measure of inflation – shot up 0.9% in March after climbing 0.5% in February. read more

The Fed is set to meet next week, with traders betting on a 50-basis-point rate hike to combat surging inflation.

Signs of aggressive monetary policy tightening, the Ukraine war and China’s COVID lockdowns have fueled fears of an economic slowdown. Data on Thursday showed the US economy unexpectedly contracted in the first quarter. read more

In afternoon trading, the S&P 500 was down 2.40% at 4,184.66 points.

The Nasdaq declined 2.78% to 12,514.30 points, while Dow Jones Industrial Average was down 1.65% at 33,356.43 points.

Exxon Mobil Corp. (XOM.N) slipped 1% after it took a $3.4 billion writedown due to its exit from Russia. Chevron Corp. (CLC.N) dropped 2.4% after its first-quarter profit underwhelmed. read more

The first-quarter earnings season overall has been better than expected so far. Nearly half of the S&P 500 companies have reported through Thursday and 81% of them have topped Wall Street’s expectations. Typically, only 66% beat estimates, according to Refinitiv data.

Declining issues outnumbered advancing ones on the NYSE by a 3.16-to-1 ratio; on Nasdaq, a 2.25-to-1 ratio favored decliners.

The S&P 500 posted 2 new 52-week highs and 19 new lows; the Nasdaq Composite recorded 11 new highs and 213 new lows.

Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru and by Noel Randewich in Oakland, Calif.; Editing by Arun Koyyur, Aditya Soni and David Gregorio

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