Stocks tumble on earnings news
U.S. stocks fell sharply Friday, with the major indexes suffering their worst single-day drop since June after disappointing earnings from heavy hitters in the tech sector.“We’ve had some household names disappointing on revenue, earnings or guidance. We had about 80 companies reporting this week: financials that did better and technology that did worse,” said Art Hogan, market strategist at Lazard Capital Markets LLC in New York.
“Since this is the worst day we’ve had in months, it reminds us that we haven’t had much volatility or downward pressure since the bottom in June,” Hogan added.
The Nasdaq composite declined 67.25 points, or 2.2 percent, to 3,005.62, with Friday’s slide pushing the index into negative turf for a second consecutive week, the most recent one down 1.3 percent. Weighing on the Nasdaq, shares of Apple Inc. dropped 3.6 percent.
Next week, about 140 S&P 500 companies are scheduled to report, with the coming earnings to include companies from a broader range of sectors, including consumer, energy and industrials. If those sectors follow in technology’s wake, there would be more reason for concern, Hogan said.
Retaining a weekly rise of 0.3 percent, the S&P 500 index dropped 24.15 points, or 1.7 percent, to 1,433.19.
The Dow Jones industrial average slumped 205.43 points, or 1.5 percent, to 13,343.51, shaving its gain for the week to 0.1 percent.
McDonald’s Corp. paced blue-chip losses that included all but one of its 30 components. The fast-food chain’s shares sank 4.5 percent after it missed consensus estimates for the third quarter.
“The earnings season is not great right now, but the fundamentals haven’t changed; the U.S. economy is still improving, and it hasn’t gotten worse in Asia or Europe,” said David Kelly, chief market strategist at JPMorgan Funds. After a strong run, “the market is taking a pause.”