Sharp drops in
THIS IS A BREAKING NEWS UPDATE: AP’s earlier story appears below.
Stocks are falling again Friday as
The S&P 500 was 1.9% lower in afternoon trading and on pace for a 6.3% loss for the week, which would be its worst since March. The Dow Jones Industrial Average was down 387 points, or 1.5%, at 26,267, as of
Worries about whether expectations built too high for some of the stock market’s biggest stars helped drive the losses. They piled on top of fears that built earlier this week about coming economic damage due to surging coronavirus counts around the world, Washington’s inability to provide more support for the economy and uncertainty surrounding the upcoming presidential election.
“Today, you have investors who are taking profits in the tech stocks that they expected to do well in the third quarter,” said
Much of the market's focus Friday was on
All four reported profit for the summer that was even better than analysts were expecting, just like the other stock in the Big Five did earlier this week. But also like Microsoft, most nevertheless fell as investors found reasons for concern within their reports.
Twitter, another high-profile tech stock, slumped 21.7% for the largest loss by far among stocks in the S&P 500. It also reported better-than-expected earnings for the latest quarter. Investors focused instead on its growth in daily users, which fell short of analysts’ expectations.
Google’s parent company, Alphabet, was an outlier and rose 3.2% after reporting growth in digital ad spending.
A similar trend has been occurring across the market: Stocks are not getting the bounce they usually do after reporting results that beat analysts' expectations. And they’ve been giving investors plenty of opportunities to do so: With nearly three quarters of the S&P 500 by market value having reported, 84% of companies have beat expectations, according to Credit Suisse.
Analysts say that's an indication that expectations may have built too high through the market's big rally and that investors' attention may simply be elsewhere given all the uncertainties sweeping the market.
Much of the market’s focus has been on what’s to come for the economy when coronavirus counts are rising at troubling rates across
Several European governments have already brought back restrictions on businesses to slow the spread of the virus. Even if the strictest lockdowns don’t return in
“Because of the spike in Covid-19 overseas, with
Meanwhile,
“The Fed is saying this, the market is saying this, and most economists are beginning to adjust their fourth quarter forecasts with the expectation that growth without stimulus is going to be hard to achieve, especially as COVID-19 cases seem to set new daily records each day,” said
Data on the economy recently has been coming in mixed, following its initial burst after its coronavirus-induced coma. Reports on Friday showed that personal incomes and consumer spending in the country rose more than expected last month. But economists warned it's unclear whether the momentum can continue if the worsening pandemic leads to more business closures and layoffs.
In markets around the world on Friday, caution was still continuing to dominate. But the moves were not as violent as earlier in the week.
A measure of fear in the
European markets ended mixed and Asian markets closed broadly lower.
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AP Business Writer
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