Amazon’s big earnings miss drags US markets lower

U.S. equities opened lower on Friday as large-cap tech stocks followed lower.

The Nasdaq composite lagged, falling 0.64 percent. The S&P 500 declined 0.23 percent, with information technology and consumer discretionary leading decliners. The Dow Jones industrial average slipped 12 points, with Boeing contributing the most losses.

DJIA Dow Industrials 21781.25
-15.30 -0.07%
S&P 500 S&P 500 Index 2470.15
-5.27 -0.21%
NASDAQ NASDAQ Composite 6360.52
-21.66 -0.34%

Shares of the e-commerce giant fell 3.7 percent on the back of much weaker-than-expected quarterly results. Amazon posted second-quarter earnings per share of 40 cents. Analysts polled by Reuters expected earnings of $1.42 a share. Sales, however, came in above expectations.

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Andrew Burton | Getty Images
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Stocks from other major tech companies also fell, including Apple, Netflix and Google-parent Alphabet. The fall came a day after the tech sector dragged the broader market lower as investors took profits off the table.

“Even in retreat, large technology names dragged the broader indices around like a ragdoll,” Jeremy Klein, chief market strategist at FBN Securities, said in a note Friday.

The major indexes notched a record high Thursday before tech rolled late-morning Thursday.

“The SPX and NDX saw ‘outside-down’ days yesterday, increasing the likelihood of downside follow-through in the days ahead,” Katie Stockton, chief technical strategist at BTIG, said in a note.

“It appears that typical August volatility may already be upon us. Initial support for the SPX is defined by the 50-day moving average, and secondary support is approximately 2400, about 3% below current levels,” she said.

In economic news, U.S. economic growth for the second quarter came in-line with expectations, the Commerce Department said Friday.

The U.S. economy grew at an annualized rate of 2.6 percent, matching Reuters’ estimate. Stock futures remained lower following the data release.

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