It may have been a touch premature yesterday to conclude that Q2 had properly shielded the market from the disastrous day that Facebook had had.  But it caught up with investors today as the Dow plunged 170 points on weak earnings reports from the tech sector, with four of the FAANG stocks taking another hit and with Facebook now giving the Nasdaq a drubbing for the second consecutive session and its biggest daily percentage drop in a month.  On news that the economy had grown 4.1 percent in Q2, its fastest pace in four years, the Dow recovered to close down just 76 points.  Amazon also had a very good day, posting profits double the estimates.  But there was a note of caution on the Q2 news:  much of it is due to farmers rushing shipments to beat tariffs, something we are warned is bound to come back to haunt in the future.  Volume was vigorous at 6.8 billion shares. 

fri  JULY 27, 2018 / 4:17 pm 

Tech stocks weigh on Wall Street

April Joyner

DJ:  25,451.06  -76.01        NAS:  7,737.42  -114.77        S&P:  2,818.82  -18.62      7/27

NEW YORK (Reuters) - Wall Street’s major indexes fell on Friday as weak earnings reports from major technology companies led to a big drop for the sector.  Intel Corp (INTC.O) shares sank 8.6 percent after the chipmaker’s data center business missed estimates amid stiff rivalry from Advanced Micro Devices Inc (AMD.O). AMD shares rose 3.2 percent.  Twitter Inc (TWTR.N) shares plunged 20.5 percent after the social media network reported a decline in monthly active users, versus the increase analysts had expected, and warned of further drops as it deletes phony accounts. 

The S&P 500 technology index .SPLRCT fell 2.0 percent, the most among the major S&P sectors. Shares of Apple Inc (AAPL.O), which is set to report quarterly results on Tuesday, fell 1.7 percent. Shares of Microsoft Corp (MSFT.O) and Alphabet Inc (GOOGL.O), which had soared after both companies recently reported strong quarterly results, dropped 1.8 percent and 2.5 percent, respectively. Alphabet shares touched an all-time high earlier in the session but reversed course. 

The pressure on tech stocks started on Thursday after Facebook Inc (FB.O) gave a dismal forecast that caught investors off guard about growth prospects in a sector that has led the market’s march toward record highs.  “There’s a bit of concern perhaps growing that the bloom’s off the rose for these tech stocks, that they are not invincible,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. 

The Dow Jones Industrial Average .DJI fell 76.01 points, or 0.3 percent, to 25,451.06, the S&P 500 .SPX lost 18.62 points, or 0.66 percent, to 2,818.82 and the Nasdaq Composite .IXIC dropped 114.77 points, or 1.46 percent, to 7,737.42. 

The Nasdaq exceeded Thursday’s losses to register once again its biggest daily percentage drop in a month.  For the week, the Nasdaq shed 1.06 percent, but the S&P rose 0.61 percent. The Dow, cushioned by promising developments in trade relations between the United States and the European Union earlier this week, added 1.57 percent. 

Intel and Twitter’s disappointing results overshadowed data from the Commerce Department showing the U.S. economy grew at a 4.1 percent annualized rate in the second quarter, its fastest pace in nearly four years, on higher consumer spending and farmers rushing soybean shipments to China to beat tariffs. 

Economists and investors cautioned against putting too much weight on the growth, which matched expectations, as the trade-related boost is expected to unwind later this year.   “It’s old news,” Ghriskey said. “Trade is bound to have an impact on the coming quarters if the tariff issue isn’t resolved.”

AbbVie Inc (ABBV.N) shares fell 3.6 percent after sales of its Humira drug in the second quarter barely beat Wall Street views, raising concerns about the drug’s viability as a cash-cow.  Amazon.com Inc (AMZN.O) shares jumped as much as 4 percent to a record high of $1,880.05 after the e-commerce giant forecast strong sales and posted a profit that was double analysts’ estimates. Amazon shares closed up 0.5 percent. 

Declining issues outnumbered advancing ones on the NYSE by a 2.03-to-1 ratio; on Nasdaq, a 3.39-to-1 ratio favored decliners.  The S&P 500 posted 25 new 52-week highs and three new lows; the Nasdaq Composite recorded 63 new highs and 99 new lows.

Volume on U.S. exchanges was 6.81 billion shares, compared with the 6.04 billion average over the last 20 trading days.