Wall Street closes sharply lower on Amazon slump, inflation worries

​reuters​​​

    Wall Street finished sharply lower on Friday, as Amazon slumped following a gloomy quarterly report, and as the biggest surge in monthly inflation since 2005 spooked investors already worried about rising interest rates.

    Amazon.com Inc (AMZN.O)tumbled in its steepest one-day drop since 2006, leaving the widely held stock near two-year lows. Late on Thursday, the e-commerce giant delivered a disappointing quarter and outlook, swamped by higher costs to run its warehouses and deliver packages. 

    Apple Inc (AAPL.O), the world's most valuable company, dropped after its disappointing outlook overshadowed record quarterly profit and sales.

    All 11 S&P 500 sector indexes fell, led lower by Consumer Discretionary (.SPLRCD) and Real Estate (.SPLRCR).

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

    "Market participants are nervous to begin with, so there is a quick trigger when it comes to these names when there's any uncertainty," said Keith Buchanan, senior portfolio manager at Globalt Investments in Atlanta. "When assumptions about these companies' growth fail to materialize, then there's definitely a 'shoot first and ask questions later' mentality."

The Nasdaq (.IXIC) has lost around 13% in April, its worst monthly performance since the global financial crisis in 2008.

    Adding to worries on Wall Street, data showed the personal consumption expenditures price index - the Fed's favored measure of inflation - shot up 0.9% in March after climbing 0.5% in February.  read more 

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

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

   According to preliminary data, the S&P 500 (.SPX) lost 155.51 points, or 3.60%, to end at 4,132.94 points, while the Nasdaq Composite (.IXIC) lost 533.40 points, or 4.14%, to 12,338.13. The Dow Jones Industrial Average (.DJI) fell 937.80 points, or 2.77%, to 32,978.59.

    Exxon Mobil Corp (XOM.N)slipped after it took a $3.4 billion writedown due to its exit from Russia. Chevron Corp (CVX.N)dropped after its first-quarter profit underwhelmed.

    The first-quarter earnings season overall has been better than expected so far. Nearly half of the S&P 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.
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