Stock markets closed Friday on a major down-note, weighed by steep drop in shares of influential companies like Amazon and Visa – as well as Goldman Sachs’ decision to downgrade its outlook for all equities over the coming months.
The Dow Jones Industrial Average dipped below 17,000 points Friday, dropping 123 points on the day for a decline of 0.7%. The blue chip index dropped 0.4% since Monday after having a tumultuous previous week in which it lost 161 points one day only to post a 123-point gain the following day.
The S&P 500 and the Nasdaq each dipped 0.5% on Friday but were up 0.3% and.7%, respectively, for the week.
Israel’s potential escalation of its ground offensive in Gaza and Russia’s massing of troops along the Ukraine border created uncertainty in the market on Friday. So did the string of bad earnings reports.
Amazon had its worst trading day since October 2011, as the e-retailer closed the day down 10%, losing more than $15 billion in shareholder value along the way. The decline followed the online retailer’s earnings report on Thursday that revealed a loss $126 million during the second quarter – far more than it lost last year and exceeding Wall Street prediction’s – because of extra spending on its operations.
Meanwhile, Visa’s earnings were up in the second quarter, but its stock still fell nearly 4% on Friday after the credit card company revised its outlook to show lower full-year revenue estimates.
Goldman Sachs also issued a notice that it is downgrading its rating of equities to “neutral” for the next three months due to the potential for a sell-off of equities following the recent bonds sell-off.