Tech companies lead stocks sharply lower in early trading

Tech companies lead stocks sharply lower in early trading

Stocks fell sharply in early trading Friday, putting the market on track for its worst week in two years, as several large companies sank after reporting weak earnings. Exxon Mobil, Chevron and Google’s parent company, Alphabet, all dropped. Bond yields shot higher after the government reported another month of strong job gains, further stoking fears of inflation and worries that higher interest rates could weigh on companies and stock prices. Crude oil prices headed lower.

KEEPING SCORE: The Standard & Poor’s 500 index fell 29 points, or 1 per cent, to 2,792 as of 10:11 a.m. Eastern Time. The Dow Jones industrial average lost 305 points, or 1.2 per cent, to 25,880. The Nasdaq slid 88 points, or 1.2 per cent, to 7,297. The Russell 2000 index of smaller-company stocks gave up 14 points, or 0.9 per cent, to 1,565.

JOBS DATA: U.S. employers added a robust 200,000 jobs in January, slightly above market expectations for a 185,000 increase. Meanwhile wages rose at the fastest pace in more than eight years, suggesting employers are competing more fiercely for workers. The figures point to an economy on strong footing even in its ninth year of expansion, fueled by global economic growth and healthy consumer spending at home.

FED IMPLICATIONS: The pickup in hourly wages, along with a recent uptick in inflation, may make it more likely the Federal Reserve will raise short-term interest rates more quickly in the coming months.

BOND YIELDS: Bond prices declined again Friday. The yield on the 10-year Treasury rose to 2.84 per cent from 2.79 per cent late Thursday. The yield on 10-year Treasury notes, the benchmark for interest rates, has risen swiftly, stoking investor concerns that higher rates could weigh on company earnings and equity prices. This week yields hovered at their highest level since January 2014, fueled by the prospect of stronger economic growth in the U.S. and abroad. European bond yields also rose after the U.S. jobs report came out.

SEARCHING FOR ANSWERS: Google’s parent company Alphabet slumped 4.6 per cent after the search giant reported results that missed analysts’ forecasts. The stock slid $63.34 to $1,118.25.

FALLING SHORT: Exxon Mobil dropped 5.7 per cent, while Chevron lost 2.7 per cent after the oil companies’ latest quarterly results fell short of forecasts. Shares in Exxon shed $5.09 to $83.98. Chevron gave up $3.37 to $122.20.

X FACTOR: Apple declined 2.6 per cent after the technology company said it sold 77.3 million iPhones in the last quarter, below the 80 million analysts expected. The stock was down $4.36 to $163.42.

HOLIDAY BOOST: Amazon climbed 4.6 per cent after its fourth-quarter profit increased by more than $1 billion. The online retail giant said it sold more voice-activated gadgets, enlisted new Prime members and benefited from its recent purchase of Whole Foods. Amazon shares gained $63.78 to $1,453.78.

ENERGY: Oil futures declined. Benchmark U.S. crude slid 41 cents to $65.39 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, fell 91 cents, or 1.3 per cent, to $68.74 per barrel in London.

CURRENCIES: The dollar rose to 110.30 yen from 109.42 yen on Thursday. The euro weakened to $1.2456 from $1.2502.

BITCOIN: The price of bitcoin was down 4.7 per cent to $8,630, according to the tracking site CoinDesk. Bitcoin futures on the Cboe Futures Exchange slid 5.7 per cent to $8,560.

MARKETS OVERSEAS: Major stock indexes in Europe declined. Germany’s DAX slid 1.1 per cent, while France’s CAC 40 lost 1.1 per cent. The FTSE 100 index of leading British shares gave up 0.2 per cent. In Asia, Japan’s benchmark Nikkei 225 fell 0.9 per cent and South Korea’s Kospi slid 1.7 per cent. Hong Kong’s Hang Seng index dipped 0.1 per cent.

Alex Veiga, The Associated Press

Related posts

Leave a Comment