November 1, 2014
Wall Street closes lower on Amazon, Visa; S&P's weekly gain erased
US stocks closed lower today in a broad consumer discretionary-led selloff after Visa and Amazon, a pair of closely watched bellwether names, reported disappointing results.
While the S&P 500 found support at its 14-day moving average, suggesting a recent positive trend in equities remains intact, the day's decline was enough to erase the benchmark index's gain for the week.
Earnings have largely been better than expected this season in terms of both profit and revenue. However, there have been high-profile disappointments, including Boeing Co and Caterpillar Inc earlier this week.
Amazon.com Inc tumbled 9.6 percent to $324.01 as the biggest drag on the S&P 500 after reporting an unexpectedly big second-quarter loss due to greater expenses on investments. About 17.8 million shares changed hands, nearly five times its 50-day average of 3.6 million.
The online retailer weighed down the consumer discretionary sector, which lost 1.2 percent.
Visa Inc was the Dow's largest decliner, down 3.6 percent to $214.77 after the world's largest credit and debit card company cut its revenue forecast for the year. As the costliest stock in the price-weighted index, Visa accounted for about half the Dow's drop.
Only two of the 10 primary S&P 500 industry sectors were positive on the day. About 64 percent of stocks traded on both the New York Stock Exchange and Nasdaq ended the day lower.
The Dow Jones industrial average fell 123.23 points, or 0.72 percent, to 16,960.57, the S&P 500 lost 9.64 points, or 0.48 percent, to 1,978.34 and the Nasdaq Composite dropped 22.54 points, or 0.5 percent, to 4,449.56.
For the week, the Dow is down 0.8 percent, the S&P is flat and the Nasdaq is up 0.4 percent in its second straight weekly rise.
About 4.95 billion shares traded on all US platforms, according to BATS exchange data, below the month-to-date average of 5.56 billion.
Weak German economic data and a slump in the shares of luxury goods group LVMH weighed on European stock markets.
Germany's benchmark DAX equity index, which hit a record high of 10,050.98 points in late June, was down by 0.3 percent at 9,760.65 points going into the middle of the trading day.
The DAX came under pressure after the Munich-based Ifo think-tank's business climate index showed that German business sentiment fell to its lowest level in nine months in July.
France's benchmark CAC equity index also fell 0.7 percent, as a 6.8 percent slide at LVMH hit the Paris market.
LVMH was also the worst performing stock, in percentage terms, on the pan-European FTSEurofirst 300 index, which slipped 0.2 percent to 1,379.85 points.
LVMH reported second quarter sales and profits that missed market forecasts late on Thursday, after European stock markets had closed.
The world's biggest luxury goods group said it had seen a drop in demand from Chinese buyers, and LVMH's woes also hit rival luxury goods companies, with Richemont falling 2.1 percent while Kering dropped 3.1 percent.
In Europe so far this quarter, 40 percent of companies have missed earnings expectations, underperforming the United States, where the number is 28 percent.
Earlier, Japan's Nikkei share average rose 1.1 percent to close at its highest level in six months, buoyed by fresh record highs for the S&P and as index heavyweight Fanuc Corp jumped after reporting strong profits.