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(For a live Reuters blog on the US, UK and EU stock markets, click LIVE / or type LIVE / in a news window.)
* Pinterest sinks on stalled US user growth
* US consumer spending increases in June, inflation increases
* Indices: Dow down 0.4%, S&P 500 down 0.5%, Nasdaq down 0.7% (first sentence recast with week’s losses, add prices, volume, weekly declines, monthly earnings, other details)
By Caroline Valetkevitch
NEW YORK, July 30 (Reuters) – U.S. stocks fell on Friday and posted losses for the week as Amazon.com shares fell after the company predicted weaker sales growth, but the The S&P 500 still posted a sixth consecutive month of gains.
Amazon.com Inc’s shares fell 7.6% – their biggest daily percentage drop since May 2020 – after the company reported second quarter earnings Thursday evening that were below analysts’ average estimate and said sales growth will slow over the next few quarters as customers venture further outside the home.
Shares of other internet and tech giants that performed well during last year’s shutdowns, including Google’s parent company Alphabet Inc and Facebook Inc, were also generally weaker.
“Overall earnings have been good. But Amazon… and some of last year’s winners are pulling some air out of the market today,” said Jake Dollarhide, managing director of Longbow Asset Management in Tulsa, Oklahoma. “This market has been pulled by big tech and when the technology is doing well, the market seems to go along with it, and when it isn’t,” it falls.
Data on Friday showed U.S. consumer spending rose more than expected in June, although annual inflation accelerated further above the Federal Reserve’s 2% target.
The Dow Jones Industrial Average lost 149.06 points, or 0.42%, to 34,935.47, the S&P 500 lost 23.89 points, or 0.54%, to 4,395.26 and the Nasdaq Composite lost lost 105.59 points, or 0.71%, to 14,672.68.
For the month, the S&P 500 was up 2.3%, the Dow Jones 1.3% and the Nasdaq 1.2%, while for the week, all three major indexes posted declines.
Strong earnings and the continued rebound in the U.S. economy helped prop up stocks this month, but the rapid spread of the Delta variant of the coronavirus and rising inflation have been concerns.
“There are still distant concerns, murmurs about the Delta variant, about increasing cases, and I think some underlying concerns about slowing reopens and a possible reversal,” Dollarhide said.
Also on the earnings front, Pampers maker Procter & Gamble Co was up 2% as it forecasted a rise in core earnings for this year, and US-listed shares of Restaurant Brands International Inc. jumped 5.1% after the Burger King owner beat quarterly profit estimates.
Pinterest Inc, however, plunged 18.2% after saying US user growth was slowing as people who used the platform for crafts and DIY projects during the height of the pandemic came out more.
Shares of Caterpillar Inc also fell, ending down 2.7%, although the company posted an increase in second-quarter adjusted earnings on a rebound in global economic activity.
Full-quarter results for S&P 500 companies were much stronger than expected, with about 89% of the nearly 300 reports to date beating analysts’ earnings estimates, according to IBES data from Refinitiv. Profits are now expected to have climbed 89.8% in the second quarter from a forecast of 65.4% in early July.
Volume on the US exchanges was 8.86 billion shares, compared to 9.74 billion on average for the full session over the past 20 trading days.
Falling issues outnumbered advancing ones on the NYSE by a ratio of 1.43 to 1; on the Nasdaq, a ratio of 1.58 to 1 favored the declines.
The S&P 500 posted 65 new 52 week highs and 2 new lows; the Nasdaq Composite recorded 84 new highs and 98 new lows. (Reporting by Caroline Valetkevitch in New York Additional reporting by Sagarika Jaisinghani in Bengaluru Editing by Arun Koyyur and Matthew Lewis)
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