- Nasdaq lower, Under Pressure From Amazon
- The Nasdaq Composite extends losses after Amazon results
- European stocks near three-month lows; Asia shares drop
- U.S. growth figures confirmed a brighter second quarter
- Euro-area economic sentiment data boosts currency; bonds drop
The Nasdaq Composite extended declines Friday, as downbeat results from internet retailing giant Amazon.com AMZN -2.37% dragged down the index.
Consumer sectors were the worst performers in the S&P 500, which fell 0.2% in recent trading. The Nasdaq Composite declined 0.1%.
The Dow Jones Industrial Average bounced around the flatline. The blue-chip index, which tends to swing less on moves in tech shares than the tech-heavy Nasdaq Composite, remains on track for a 1% weekly gain.
The dollar fell against all but two of its G-10 peers, while Treasury yields were little changed as second-quarter growth in the U.S. was less robust than estimated. Oil headed for the best week of the year.
Before Friday’s selloff, signs of economic recovery had boosted stocks in the U.S. and globally to records. Technology shares have led the charge, with companies in the sector soaring 22 percent this year for the best performance among 11 groups in the S&P 500.
The Stoxx Europe 600 fell 1%—marking its lowest close since April. Europe’s technology sector shed 1.3% on Friday, while Japan’s Nikkei Stock Average and Hong Kong’s Hang Seng Index each fell 0.6% amid pressure on the sector.
Brent crude, which is on target for an almost 10 per cent advance in July, traded at $52.47 a barrel late afternoon on Friday. This week alone, the benchmark rose by almost 9 per cent or $4.39 a barrel — the strongest seven-day jump since December — countering a sharp drop earlier in the month.
Here are the main moves in markets from Bloomberg
- The S&P 500 Index fell 0.2 percent to 2,470.02 as of 2:24 p.m. in New York.
- Amazon lost 3.2 percent, while Starbucks Corp. fell 7.2 percent.
- Altria Group Inc. tumbled 9.1 percent to lead declines in tobacco shares.
- The Stoxx Europe 600 Index declined 1.1 percent, the lowest in almost 14 weeks.
- Germany’s DAX Index fell 0.5 percent.
- The Bloomberg Dollar Spot Index declined 0.4 percent.
- The euro increased 0.6 percent to $1.1748.
- The British pound advanced 0.5 percent to $1.3135, the strongest since September.
- The Japanese yen gained 0.4 percent to 111.79 per dollar, the strongest in almost six weeks.
- The yield on 10-year Treasuries fell two basis points to 2.29 percent.
- Germany’s 10-year yield climbed one basis point to 0.54 percent.
- Britain’s 10-year yield advanced two basis points to 1.218 percent.
- West Texas Intermediate crude climbed 1.2 percent to $49.62, hitting the highest in eight weeks with its fifth straight advance. The contract is up more than 8 percent in the week.
- Copper was little changed as it headed for its best weekly gain in six months.
- Gold futures climbed 0.7 percent to $1,274.80 an ounce, the strongest in six weeks.
- The MSCI Asia Pacific Index dropped 0.6 percent, erasing its gain for the week. Tech shares in the gauge fell 1.5 percent.
- South Korea’s Kospi index slumped 1.7 percent, the most since November, with Samsung tumbling 4.1 percent. Hong Kong’s Hang Seng Index lost 0.5 percent, with Tencent dropping 0.9 percent.
- Benchmark indexes in Australia, Taiwan and Singapore were down more than 0.7 percent. The Shanghai Composite Index rose 0.1 percent.
- Japan’s Topix index fell 0.4 percent. Data on Friday showed that while household spending in Japan rose 2.3 percent, its first gain in more than a year, Japan’s key price gauge was unchanged in June.
Thursday’s Key Earnings
Altria (NYSE:MO) +3.1% with a boost from smokeless tobacco.
Amazon (AMZN) -2.6% AH with a drop in quarterly income.
Baidu (NASDAQ:BIDU) +3.7% AH posting double-digit gains.
Bristol-Myers (NYSE:BMY) -3.1% following in-line earnings.
Celgene (NASDAQ:CELG) -2.6% despite topping forecasts.
ConocoPhillips (NYSE:COP) +2.2% returning to an underlying profit.
Dow Chemical (NYSE:DOW) +0.2% as worldwide prices picked up.
Intel (NASDAQ:INTC) +1.2% AH lifting its profit outlook.
MasterCard (NYSE:MA) -1.6% despite impressive volume growth.
Procter & Gamble (NYSE:PG) +1.6% improving operating margins.
Starbucks (NASDAQ:SBUX) -5.6% AH closing all Teavana stores.
Twitter (NYSE:TWTR) -14.1% losing monthly users in the U.S.
UPS (NYSE:UPS) -4% on soft outlook for rest of 2017.
Verizon (VZ) +7.7% announcing subscriber additions.
Amazon fell 2.6% in after-hours trading on Thursday, as quarterly income plunged 77%, well below expectations. Revenue was strong, but heavy investments in video and global expansion hurt the retailer’s bottom line. CEO Jeff Bezos also briefly unseated Bill Gates as the world’s richest person yesterday, when Amazon (NASDAQ:AMZN) shares rose ahead of the earnings report.
Tesla will hand over Model 3 keys to the first 30 customers tonight at a party which will be livestreamed starting at 8:45 p.m. PT. How to trade the event? If history is any guide, Tesla (NASDAQ:TSLA) shares tend to fall once the rubber meets the road. The stock dropped significantly the week and month after both of the last two releases: the Model S in 2012 and Model X in 2015.
Ready for liftoff… SpaceX (Private:SPACE) has disclosed a new $351M fundraising round that would likely bump its valuation to $21B, up from the $12B it was valued at in early 2015. If the company completes the financing as planned, it would propel it towards the top of the list of so-called unicorns, or private tech companies with sky-high valuations.
The California Air Resources Board has unanimously approved the first $200M tranche (of a total $800M plan) for clean vehicle infrastructure that VW (OTCPK:VLKAY) has agreed to spend in the state as part of its settlement over emissions cheating. The automaker must spend $2B nationwide over the next decade to advance zero emissions vehicles, including charging and development of ride-sharing fleets.
Fiat Chrysler has come full circle on electric vehicles, with its once-skeptical CEO saying he’s now ready to embrace them. On a conference call with analysts, Sergio Marchionne said Fiat’s (NYSE:FCAU) premium Maserati sports cars will begin introducing electric engine-powered models after 2019, and that by early next decade more than half of the brand’s cars will be electrified.
“Normally I do not comment on rumors, but the speculation about my future and UBER has become a distraction,” said the head of Hewlett Packard Enterprise (NYSE:HPE). “Uber’s CEO will not be Meg Whitman.” There’s a new name being floated among a handful of candidates for the position: General Electric’s (NYSE:GE) Jeff Immelt, who will relinquish his role as chief executive at the end of the month.
Looking to finance its $85.4B takeover of Time Warner (NYSE:TWX), AT&T (NYSE:T) is finalizing the year’s largest corporate bond sale. The company is set to raise $22.5B through a seven-tranche bond offering, sources told the FT. The sale will include notes with maturities ranging between 5.5 and 41 years, with yields on new 10-year debt set to price 160 bps above benchmark Treasuries.
Verizon is in talks to acquire WideOpenWest’s (NYSE:WOW) fiber network in the Chicago area for more than $200M, Reuters reports. In April, Verizon (NYSE:VZ) struck a deal to buy optical fiber from Corning for at least $1.05B over the next three years, while in February, it closed on its acquisition of XO Communications’ fiber-optic network business for about $1.8B.
European bank earnings roundup: Credit Suisse (NYSE:CS) +1.5%premarket after reporting a record level of assets under management during Q2 and its strongest inflows in six years. UBS fell 2.8% following a cautious outlook and highlighting that low volatility had hurt certain sectors, while Barclays (NYSE:BCS) rose 1.3% despite seeing its first earnings hit by the divestment of its Africa business.
According to NYC’s Comptroller, Wells Fargo (NYSE:WFC) needs to work more quickly to remake its board following a sales scandal and public rebuke at the bank’s annual meeting in April. “The extent of fraud at Wells Fargo was stunning,” Scott Stringer declared. “Executives have been held responsible – but now directors must answer for their part… This board needs to be refreshed – today.”