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US Stocks Take Tumble After Amazon Reports Loss

US Stocks Take Tumble After Amazon Reports Loss

By Agence France-Presse | Updated: 26 July 2014 12:02 IST

Wall Street stocks Friday moved sharply lower in early trade following a disappointing earnings report from Amazon and despite a positive report on US durable goods orders.

About 30 minutes into trade, the Dow Jones Industrial Average fell 102.19 points (0.60 percent) to 16,981.61.

The broad-based S&P 500 dropped 5.92 (0.30 percent) to 1,982.06, while the tech-rich Nasdaq Composite Index declined 19.04 (0.43 percent) to 4,453.07.

Amazon sank more than 10 percent after reporting a net loss of $126 million for the second quarter, much bigger than the $7 million loss a year ago. Analysts said the market is losing patience with the online retailer despite strong revenue growth.

US durable goods orders rose 0.7 percent in June, much stronger than the 0.3 percent increase expected by analysts and a positive sign of momentum in the manufacturing industry.

Equity markets in Britain, France and Germany were all lower after the IFO economic institute's index of German business confidence fell sharply to 108.0 points in July from 109.7 points in June, attributed to anxiety over violence in Ukraine and the Middle East.

Dow member Visa lost 4.9 percent after shaving its 2014 revenue growth forecast a full percentage point, to 9.0-10.0 percent.

Starbucks fell 1.7 percent despite reporting a 22.7 percent rise in profit to $512.6 million. The coffee chain scored a seven percent rise in comparable store sales in the US.

Pandora Media plummeted 13.5 percent on a disappointing earnings forecast. The online music service expects to earn between five cents and eight cents per share in the upcoming quarter, whereas analysts projected eight cents.

Chemical company LyondellBasell gained 3.9 percent as second-quarter earnings jumped 26.9 percent to $1.2 billion.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.48 percent from 2.51 percent Thursday, while the 30-year dropped to 3.26 percent from 3.30 percent. Bond prices and yields move inversely.

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