NEW YORK (AP) â” Disappointing news on the American consumer, reflected in the results of retail giant Amazon and credit card processor Visa, dragged down the stock market Friday, putting two major indexes on course for a weekly loss.
KEEPING SCORE: The Dow Jones industrial average lost 130 points, or 0.8 percent, to 16,954 as of 2:35 p.m. Eastern time. The index is on pace to close below 17,000 for the first time since July 9.
The Standard & Poor’s 500 index fell nine points, or 0.5 percent, to 1,979. The tech-heavy Nasdaq composite dropped 22 points, or 0.5 percent, to 4,449.
For the week, the S&P 500 is flat and the Dow is off 0.9 percent.
MISSED: Amazon’s stock slumped 10 percent after the online retail giant posted a much wider loss than analysts had forecast, hit by expenses. The Seattle-based company is focused on spending the money it makes to expand into new areas and products, including a smartphone, the Fire, which starts selling Friday. Amazon fell $36.08 to $322.53 in afternoon trading and was the biggest decliner in the S&P 500 index.
NOT EVERYWHERE: Dow member Visa fell $9.50, or 4 percent, to $212.23. The credit card processing giant reported an 11 percent rise in quarterly profit but cut its full-year forecast on concerns about growth overseas. Because the Dow is a price-weighted index, and Visa is the most expensive stock in the Dow, Visa was having an outsized impact on the Dow. Roughly 60 points of the Dow’s decline can be attributed to Visa.
WORRIES ON THE CONSUMER: Visa is a closely watched company because of its heavy exposure to U.S. and global consumer spending, so to see the company warn about consumer spending is worrisome, strategists say.
“Visa put a lot of caution into the market this morning,” said Quincy Krosby, a market strategist at Prudential Financial
‘COMPLACENCY’: “I continue to see the level of complacency in the (stock) market to be unnerving,” Scott Clemons, chief investment strategist at Brown Brothers Harriman, which manages $25 billion in assets for private investors. “All of this geopolitical tension, the market trading near all-time highs, I think the market is at a critical state right now.”
Clemons said he doesn’t believe the market is poised for a major sell-off, but instead thinks investors should brace for more volatility and more heavy-handed reaction to disappointing earnings or data, like Friday’s Amazon and Visa results.
NEEDS A PICK-ME-UP: Starbucks fell $1.85, or 2 percent, to $78.61 despite the company reporting a profit that came in above analysts’ expectations. The company also raised its full-year profit forecast.
BONDS AND OIL: The yield on the 10-year Treasury note eased to 2.48 percent from 2.50 percent late Thursday. Bond yields fall when prices rise. Benchmark U.S. crude oil fell 55 cents to $101.51 a barrel on the New York Mercantile Exchange