Hot news – The Dow tumbled on Friday, shrugging off data showing ongoing U.S. economic growth as high-flying tech companies were punished in the wake of downbeat reports from Google and Amazon.
The Dow Jones Industrial Average fell about 1.19%. The S&P 500 fell 1.73%, while the Nasdaq Composite fell 2.07%. The three indexes are on track for their worst month in years.
Investors grappled with wild swings on Wall Street amid growing concerns U.S. corporates were approaching peak profit growth after tech heavyweights Google and Amazon (NASDAQ:AMZN) delivered underwhelming quarterly reports and signalled a softer patch of growth for the fourth quarter.
Alphabet (NASDAQ:GOOGL) fell 1.80% after it posted third-quarter revenue that fell short of expectations. Amazon shares, meanwhile, dropped nearly 8% as its third-quarter revenue also fell short, while its weaker-than-expected guidance for the key holiday season exacerbated concerns.
The S&P 500 tech sector closed about 2% lower, while the communication services sector, which includes Netflix, Facebook, Alphabet and telecom companies sunk more than 2%.
The pair of downbeat reports overshadowed data showing the U.S. economy grew 3.5% in the third quarter, above economists’ estimates for a 3.3% increase, though analysts said a deeper look into the data revealed signs of a possible slowdown.
Disappointing business investment suggested “the boost in capex from tax cuts and deregulation was likely front-loaded and fading quickly,” BNP Paribas said. “We continue to expect growth to slow from here as the sugar high in consumer spending turns into a sugar low.”
Energy, meanwhile, was also caught up in the selling frenzy, falling nearly 1%, exacerbating the decline in the broader market as a rise in oil prices Friday failed to offset a loss of more than 3% for the week.
Building-products companies were also under pressure, led by a more-than-20% drop in shares of Mohawk Industries (NYSE:MHK) after its third-quarter earnings came up short of estimates and fourth-quarter earnings per share guidance of $2.45 to $2.60 was nearly 30% below the consensus estimate at the midpoint.
Shares of Masco Corporation (NYSE:MAS), Fortune Brands Home & Security (NYSE:FBHS) and Johnson Controls International (NYSE:JCI) also fell.
In corporate news, Tesla (NASDAQ:TSLA) retreated from session highs, but still managed a 5% gain, shrugging off a report from the WSJ claiming the FBI launched a criminal probe into whether the electric automaker had misstated production figures and misled investors.
Top S&P 500 Gainers and Losers Today:
Roper Technologies (NYSE:ROP), Cabot Oil & Gas (NYSE:COG) and Cincinnati Financial (NASDAQ:CINF) were among the top S&P 500 gainers for the session.
Mohawk Industries (NYSE:MHK), Western Digital (NASDAQ:WDC) and SVB Financial (NASDAQ:SIVB) were among the worst S&P 500 performers of the session.