Wall Street closes sharply lower on Amazon slump, inflation worries

The logo of Amazon is seen at the company logistics center in Boves, France, in this Aug. 8, 2018, file photo. Wall Street slid Friday to its deepest daily losses since 2020, as Amazon slumped following a gloomy quarterly report, and the biggest surge in monthly inflation since 2005 spooked investors already worried about rising interest rates. Reuters-Yonhap

Wall Street slid on Friday to its deepest daily losses since 2020, as Amazon slumped following a gloomy quarterly report, and the biggest surge in monthly inflation since 2005 spooked investors already worried about rising interest rates.

Amazon.com Inc tumbled 14.05 percent in its steepest one-day drop since 2006, leaving the widely held stock near two-year lows. Late Thursday, the e-commerce giant delivered a disappointing quarterly report and outlook, swamped by higher costs.

Apple Inc, the world's most valuable company, dropped 3.66 percent after its disappointing outlook overshadowed record quarterly profit and sales.

All 11 SP 500 sector indices fell, led lower by a 5.9 percent slide in Consumer Discretionary and a 4.9 percent drop in Real Estate.

The SP 500 logged it largest one-day decline since June 2020. The Nasdaq's decline was its largest since September 2020.

Downbeat results and worries about aggressive monetary policy tightening by the Federal Reserve have hammered megacap technology and growth stocks this month.

The Fed is set to meet next week, with traders betting on a 50-basis-point rate hike to combat surging inflation.

Ahead of the weekend and the Fed meeting next week, "people are clearing the decks. The disappointing guidance from Apple and Amazon and a few other companies set the stage yesterday for today to be weak and it accelerated as we ended out the day," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

The Nasdaq has lost about 13 percent in April, its worst monthly performance since the global financial crisis in 2008.

The SP 500 has fallen 13% so far in 2022, its steepest four-month decline to start any year since 1939.

Adding to fears on Wall Street, data showed the personal consumption expenditures price index ― the Fed's favored measure of inflation ― shot up 0.9 percent in March after climbing 0.5 percent in February.

Signs of aggressive monetary policy tightening, the Ukraine war and China's COVID lockdowns have fueled fears of an economic slowdown. Data released Thursday showed the U.S. economy unexpectedly contracted in the first quarter.

The SP 500 declined 3.63 percent to end the session at 4,131.93 points.

The Nasdaq declined 4.17 percent to 12,334.64 points, while the Dow Jones Industrial Average declined 2.77 percent to 32,977.21 points.

For the week, the SP 500 has lost 3.3 percent, the Nasdaq 3.9 percent and the Dow 2.5 percent.

The SP 500 has gained or lost 2 percent or more in a day some 33 times so far in 2022, compared to 24 such days in all of 2021.

Exxon Mobil Corp slipped 2.24 percent after it took a $3.4 billion write-down due to its exit from Russia. Chevron Corp dropped 3.16 percent after its first-quarter profit underwhelmed.

The first-quarter earnings season overall has been better than expected so far. Nearly half of the SP 500 companies have reported through Thursday and 81% of them have topped Wall Street's expectations. Typically, only 66% beat estimates, according to Refinitiv data.

Declining issues outnumbered advancing ones on the NYSE by a 3.91:1 ratio; on Nasdaq, a 2.85:1 ratio favored decliners.

The SP 500 posted two new 52-week highs and 47 new lows; the Nasdaq Composite recorded 13 new highs and 385 new lows.

Volume on U.S. exchanges was 12.4 billion shares, compared with an 11.8 billion average over the last 20 trading days. (Reuters)