U.S. stocks opened lower on Friday despite positive economic data as weak Amazon earnings and concerns over continued unrest in Ukraine and Gaza weighed on markets.
Amazon shares dropped more than 10 percent in early trading, on track for its worst day since October 2011 and accounting for 95 percent of losses on the Nasdaq 100. On the Dow, Visa fell more than 4 percent on its lowered full-year revenue forecast. The combined losses have contributed to about a third of the declines on the S&P 500.
“You get these one-off events that spook investors a bit,” said Alan Skrainka, chief investment officer at Cornerstone Wealth Management. “We’ve been pretty hesitant to make new commitments at these levels. It’s been three years since we’ve had any kind of correction and a pause at this point would be perfectly natural.”
Orders for long-lasting U.S. manufactured goods rose more than expected in June, pointing to momentum in the economy at the end of the second quarter.
“The markets are looking a bit tired,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “We’re headed to a very busy weak of economic data,”
Overall earnings reports for the season have been positive, but Amazon posted a second-quarter loss of 27 cents a share, sharply missing expectations for a loss of 15 cents a share. The company posted sales of $19.34 billion, matching forecasts. The online retailer’s first smartphone, the Fire phone, becomes available today.
In the Middle East, authorities in Gaza reported that 15 people were killed on Thursday after Israeli forces shelled a shelter at a United Nations (UN)-run school, bringing the civilian death toll above 800. The UN warned that Israel may have committed war crimes in its near three-week offensive in Gaza.
The European Union is mulling measures to curb Russia access to the capital markets, after the downing of the Malaysia Airlines passenger jet over eastern Ukraine last week. Adding to tensions, Ukrainian Prime Minister Arseniy Yatsenyuk announced his resignation on Thursday, after two parties pulled out of the governing coalition.
The Dow Jones Industrial Average fell more than 100 points in the open, or 0.65 percent, at 16,972.34, weighed by Visa. The index has alternated between gains and losses for eight straight weeks, a pattern not seen since June 2008.
The S&P 500 fell more than 7 points, or 0.38 percent, at 1,980.53, with Consumer Discretionary the greatest laggard, and Telecommunications and Materials the only gainers among the 10 sectors. On Thursday, the S&P 500 edged higher to close at its 27th record for the year.
The Nasdaq dropped more than 25 points, or 0.58 percent to 4,445.55.
For every two decliners, one gained on the New York Stock Exchange, with an exchange volume of more than 68 million and a composite volume of more than 230 million at 9:48 a.m. ET.
—By CNBC’s Evelyn Cheng. Reuters contributed to this report.