By Stephen Culp
NEW YORK, July 24 – Wall Street retreated on Friday, heading into the weekend with a broad sell-off due to weak earnings, surging coronavirus cases and geopolitical uncertainties.
For the second day in a row, the tech sector weighed heaviest on all three major U.S. stock averages. Intel Corp led the decline, its shares plunging after the chipmaker reported a delay in production of a smaller, faster 7-nonometer chip.
“There’s a skittishness ahead of the weekend after yesterday’s tech and growth sell-off,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.
“It’s been an unbelievable ride for the Nasdaq and tech over the last two moths,” Detrick added. “A well-deserved correction makes a lot of sense in our view.”
Each index posted a weekly loss, with the S&P 500 and the Dow snapping three-week winning streaks. Nasdaq had its weakest week of the last four.
The retreat followed a rally that brought the S&P 500 to nearly 5% below its record high reached in February. The bellwether index is now near break-even for the year, while the Nasdaq has gained more than 15% year-to-date.
“With the rally we’ve seen so far in July, it makes sense to see anxiety ahead of a huge earnings week, the Fed decision and what’s likely to be the worst GDP in our lifetimes,” Detrick added.
Momentum stocks Apple, Alphabet Inc and Amazon.com are scheduled to post results on July 30, the day the U.S. Commerce Department is due to give its first take on second-quarter GDP. Analysts projected the economy dropped by a bruising 35% during the three-month period.
More than 1,000 Americans died from COVID-19 on Thursday, the third straight day for that grim milestone as total cases surged past 4 million.
Beijing fired back at Washington shuttering China’s Houston consulate by closing the U.S. consulate in the city of Chengdu.
Unofficially, the Dow Jones Industrial Average fell 182.99 points, or 0.69%, to 26,469.34, the S&P 500 lost 20.04 points, or 0.62%, to 3,215.62 and the Nasdaq Composite dropped 98.24 points, or 0.94%, to 10,363.18.
Of the 11 major sectors in the S&P 500, all but consumer discretionary were in the red.
Healthcare lost ground ahead of executive orders by President Donald Trump aimed at lowering drug prices.
Second-quarter earnings season charges ahead, with 128 constituents of the S&P 500 having reported. Of those, 80.5% have cleared a very low bar of analyst expectations.
American Express Co fell after reporting an 85% slump in quarterly profit after setting aside nearly $628 million to cover potential defaults.
Verizon Communications Inc beat analyst profit and revenue estimates as the telecom saw strong demand due to stay-at-home mandates, sending its shares higher.
Honeywell International Inc’s cost-cutting efforts resulted in better-than-expected second-quarter profit despite a sharp decline in its aerospace segment.
Intel rival Advanced Micro Devices Inc shares jumped, while Tesla Inc extended Thursday’s losses. (Reporting by Stephen Culp; Editing by David Gregorio)