Amazon Woes Drag Wall Street Downwards

Amazon.com Inc shares sank 7.6 percent – their biggest daily percentage drop since May 2020 – after the company reported late on Thursday revenue for the second quarter that was shy of analysts' average estimate and said sales growth would ease in the next few quarters as customers ventured more outside the home.

Shares of other internet and tech giants that did well during the lockdowns of last year, including Google parent Alphabet and Facebook, were mostly lower as well.

"Overall earnings have been good. But Amazon ... and some of last year's winners are taking some of the air out of the market today," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "This market has been driven by big tech and when tech does well, the market seems to go right along with it, and when it doesn't," it falls.

Data on Friday showed U.S. consumer spending rose more than expected in June, although annual inflation accelerated further above the Federal Reserve's 2 percent target.

The Dow Jones Industrial Average fell 0.42 percent, to 34,935, the S&P 500 lost 0.54 percent, to 4,395 and the Nasdaq Composite dropped 0.71 percent, to 14,673.

For the month, the S&P 500 rose 2.3 percent, the Dow gained 1.3 percent and the Nasdaq added 1.2 percent, while for the week all three of the major indexes posted declines.

Strong earnings and the continued rebound in the US economy have helped to support stocks this month, but the rapid spread of the Delta variant of the coronavirus and rising inflation have been concerns. (Reuters)