Stocks plunged Friday as the release of disappointing quarterly results from key tech companies overshadowed strong economic data.
The Dow Jones Industrials plunged 323.3 points, or 1.3% — off its lows of the morning to 24,661.25, with Home Depot lagging, and was about 1.5% away from entering correction levels.
The S&P 500 fell 46.25 points, or 1.7%, to 2,659.32, and was briefly down more than 10% from its 52-week high, entering correction territory. The broad index hit a record high on Sept. 21.
Seven of the 11 S&P 500 sectors are also down at least 10% from their respective 52-week highs, including energy, materials and financials.
Around 80% of the index’s stocks are also in a correction. The average stock market correction results in a 13.8% drop and lasts five months, according to Gluskin Sheff Research.
The NASDAQ plummeted 150.26 points, or 2.1%, to 7,168.08
Amazon let go of 7.9%, and Google parent company Alphabet fell 3.3%, after they released their latest quarterly results on Thursday. Earnings for both companies topped analyst estimates, but revenues fell short.
Friday’s decline comes after equities rallied in the previous session. The major averages are also set to post big losses for the week. The S&P 500 is down 2.2%, and Dow is behind 1.8% this week, respectively, entering Friday’s session.
These losses also add to a sharp drop seen throughout this month. Through Thursday’s close, the Dow slid 5.6%, and S&P 500 dawdled 7.2% for October. The Nasdaq, meanwhile, had lost 9.1%.
The Commerce Department reported the U.S. economy grew at a 3.5% rate in the third quarter, above a 3.4% estimate. The government also said its personal consumption expenditures (PCE) index, a key measure of inflation, increased by 1.6% last quarter.
Stock have suffered in recent weeks as fears of rising inflation — and rising interest rates — trim corporate profit expectations. Since the PCE index is the Federal Reserve’s preferred inflation gauge, any sign that the measure may be slowing could stall the central bank in its plan to continue to raise the overnight rate.
Consumer spending, which account for more than two-thirds of economic activity, surged by 4% in the third quarter, the fastest pace since the fourth quarter of 2014.
Prices for the benchmark for the 10-year U.S.Treasury hiked, lowering yields to 3.08% from Thursday’s 3.13%. Treasury prices and yields move in opposite directions.
Oil prices recovered 41 cents at $67.74U.S. a barrel.
Gold prices leaped $10.20 an ounce to $1,242.60
This article provided by NewsEdge.