US Stocks Slip; Still Get Monthly Gain 07/30 11:51
Stocks fell in afternoon trading on Wall Street Friday with internet retail
giant Amazon weighing down major indexes following a weak sales report and
(AP) -- Stocks fell in afternoon trading on Wall Street Friday with internet
retail giant Amazon weighing down major indexes following a weak sales report
The S&P 500 index fell 0.5% as of 12:17 p.m. Eastern and is on pace for a
weekly loss, though still poised to finish out July with its sixth monthly
gain. The Dow Jones Industrial Average fell 121 points, or 0.4%, to 34,963 and
the Nasdaq fell 0.7%.
Amazon, which fell 6.8%, weighed down the Nasdaq and the benchmark S&P 500,
which is about evenly split between gainers and losers. The company reported
disappointing sales during its second quarter and gave investors a weak sales
forecast. The company did extremely well during the worst of the virus pandemic
as people were forced to hunker down and shop from home, but the recovery has
more people returning to in-store shopping and other pre-pandemic activities.
Digital pinboard and shopping tool company Pinterest ran into a similar
issue during the second quarter. Its stock slumped 18.5% after reporting
disappointing user growth.
It's been a busy week for corporate earnings and roughly 59% of the
companies in the S&P 500 have reported results, according to FactSet.
"What's really encouraging is that the sales surprise is trending positive,"
said Sal Bruno, chief investment officer at IndexIQ. "That tells me that
companies are growing, which goes along with the economic reopening."
So far, 87% of companies have reported surprisingly good sales results for
the second quarter, according to FactSet.
Investors are also reviewing the latest economic data as they try to gauge
the economic recovery's trajectory. Consumer spending, which makes up a
majority of the economy, rose 1% in June. A key measure of inflation rose 3.5%,
marking the fastest such 12-month surge since 1991.
Inflation fears have been lingering over the market through the year.
Investors are trying to figure out whether rising inflation will be a temporary
effect of the economic recovery or longer lasting. They are also closely
watching for the Federal Reserve's reaction to both the economic recovery and
rising inflation. The central bank is expected to eventually temper its
support, through bond purchases and other measures, but the timing is still
The yield on the 10-year Treasury fell to 1.24% from 1.27% late Thursday.
Indexes have been steadily rising, though trading has been choppy as
investors gauge a range of economic data, corporate earnings and news about the
virus pandemic. Investors could be in for more of the same in August, Bruno
"The fundamental outlook is generally pretty strong going forward, even if
there is some shorter term weakness and volatility," he said.