US stocks closing: U.S. stocks suffered their worst day since late June on Friday,after bellwethers General Electric and McDonald’s extended a string of disappointing earnings.
The Nasdaq ended down 2.19 percent,dragged lower for a second day by Google’s weak results. Microsoft dropped 2.9 percent to $28.64 after it said profits fell on poor sales of PCs. Google’s stock lost 1.9 percent to close at $681.79.
For the Dow,Friday’s decline marked its worst day since June 21 – with the sell-off coming on the 25th anniversary of Black Monday,the Dow’s worst single-day percentage loss ever.
For Wall Street,corporate America’s top-line figures are of particular concern. The beat rate for revenue forecasts is just 41.4 percent,compared to the long-term average of 62 percent,according to Thomson Reuters data.
General Electric Co shares fell 3.4 percent to $22.03. Quarterly earnings met Wall Street’s expectations,but revenue fell short of estimates. GE,however,stood by its full-year earnings forecast.
Going into the earnings season,traders were more forgiving of a weaker period,but the forward guidance is killing us now,said Todd Schoenberger,managing principal at the BlackBay Group in New York.
McDonald’s,Chipotle,Coca-Cola have all been slammed. And Wal-Mart,Target,even Dollar Stores are getting hit. That’s tough to stomach because across income levels,everything is sharply lower.
McDonald’s Corp lost 4.5 percent to hit $88.72 and Chipotle Mexican Grill fell 15 percent to $243 after quarterly profits missed analysts’ expectations.
The S&P 500 still managed to gain 0.3 percent this week,but the Dow eked out a gain of just 0.1 percent.
The sharp declines boosted expectations of near-term volatility. The CBOE Volatility Index,Wall Street’s gauge of investor anxiety,rose 13.5 percent to end at 17.06 – off its intraday high of 17.60. Options expiration also contributed to Friday’s heavy activity.
The Dow Jones industrial average tumbled 205.43 points,or 1.52 percent,to 13,343.51 at the close. The Standard & Poor’s 500 Index dropped 24.15 points,or 1.66 percent,to 1,433.19. The Nasdaq Composite Index slid 67.24 points,or 2.19 percent,to close at 3,005.62.
This sell-off is definitely earnings-driven,but there is also an element of profit taking after several strong days,said Andrew Wilkinson,chief economic strategist at Miller Tabak & Co in New York. But it is a very quiet crash,coming on the anniversary of the 1987 collapse.