Wall Street dips as Intel drags tech stocks lower
U.S. stocks fell on Friday as technology shares were dragged lower by disappointing results from Intel and Twitter, although a jump in Amazon after strong earnings helped curb losses.
Intel sank 7.4 percent after its fast-growing data center business missed estimates as the chipmaker faced stiff rivalry from Advanced Micro Devices, which rose 3.8 percent.
Twitter`s shares plunged 18.3 percent after reporting fewer-than-expected monthly active users and warning that the closely watched figure could keep falling as it deletes phony accounts.
Five of the 11 main S&P sectors were lower, with technology`s 0.94 percent drop, the steepest.
The pressure on tech stocks continued from Thursday when Facebook`s dismal forecast caught investors off guard about the growth prospects in a sector that has led the market`s march towards record highs.
"So you can continue to have strong fundamentals but if that confidence is shaken a little bit you`re going to see a bigger pullback than the fundamentals warrant," said Brad McMillan, chief investment officer for Commonwealth Financial Network.
The U.S. economy grew at a 4.1 percent annualized rate in the second quarter, its fastest pace in nearly four years, the Commerce Department said, as consumers boosted spending and farmers rushed shipments of soybeans to China to beat retaliatory trade tariffs.
But the growth pace matched expectations and economists cautioned against putting much weight on the surge as the trade-related boost is expected to unwind later this year.
"A pretty big number is really not a huge shock, but the question is, are the numbers sustainable," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
Amazon.com jumped as much as 4 percent to a record high of $1,880.05 after forecasting strong sales and posting a profit that was double analysts` estimates.
At 11:41 a.m. EDT the Dow Jones Industrial Average was up 30.20 points, or 0.12 percent, at 25,557.27, the S&P 500 was down 4.50 points, or 0.16 percent, at 2,832.94 and the Nasdaq Composite was down 44.20 points, or 0.56 percent, at 7,807.99.
The S&P is up about 1 percent so far this week, which has seen a large number of marquee companies report results, not all of them encouraging, and the U.S and the European Union agreed to negotiate on trade.
Earnings of S&P 500 companies are now expected to rise 22.6 percent in the second quarter, compared with an estimate of 20.7 percent as of July 1, according to Thomson Reuters I/B/E/S.
The energy sector dipped 0.17 percent, weighed down by a 2.9 percent slide in Exxon after its results fell short of expectations.
Health stocks were also under pressure, falling 0.48 percent, after a round of disappointing earnings.
AbbVie fell 3.7 percent after a slight beat on sales of its Humira drug failed to allay concerns over the future of the cash-cow product.
Merck shed 0.9 percent after saying it was unlikely to follow rival Eli Lilly in separating its animal health unit.
Declining issues outnumbered advancers for a 1.48-to-1 ratio on the NYSE and a 2.60-to-1 ratio on the Nasdaq.
The S&P index recorded 22 new 52-week highs and three new lows, while the Nasdaq recorded 59 new highs and 67 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.