U.S. Stocks Continue To Post Steep Losses After Early Sell-Off

After moving sharply lower early in the session, stocks continue to see substantial weakness in mid-day trading on Friday. The sell-off on the day has more than offset the rebound seen in the previous session, with the Dow tumbling to a three-month intraday low.

The major averages have climbed off their worst levels in recent trading but continue to post steep losses. The Dow is down 264.77 points or 1 percent at 26,394.34, the Nasdaq is down 275.83 points or 2.5 percent at 10,909.76 and the S&P 500 is down 47.11 points or 1.4 percent at 3,263.00.

The sharp pullback on Wall Street partly reflects a negative reaction to earnings news from a number of big-name tech companies.

Shares of Apple (AAPL) have slumped by 5.5 percent after the tech giant reported better than expected fiscal fourth quarter earnings but a steep decline in iPhone sales. Apple also failed to provide guidance for the current quarter.

Social media giant Facebook (FB) has also come under pressure after reported third quarter results that exceeded estimates but warning of “a significant amount of uncertainty” looking ahead.

Shares of Amazon (AMZN) have also moved notably lower after the online retail giant reported third quarter results that beat estimates but provided a disappointing forecast for operating income in the fourth quarter.

Twitter (TWTR) is also posting a steep loss after the social media giant reported third quarter earnings that exceeded estimates but weaker than expected user growth.

On the other hand, shares of Alphabet (GOOGL) have moved significantly higher after the Google parent reported third quarter results that beat analyst estimates on both the top and bottom lines.

Lingering concerns about the recent spike in coronavirus cases are also weighing on Wall Street along with uncertainty about next week’s presidential elections.

Meanwhile, traders have shrugged off some upbeat economic data, with a report from the Commerce Department showing personal income rebounded by more than anticipated in the month of September.

The Commerce Department said personal income climbed by 0.9 percent in September after tumbling by a revised 2.5 percent in August.

Economists had expected personal income to rise by 0.4 percent compared to the 2.7 percent nosedive originally reported for the previous month.

The report also showed a bigger than expected increase in personal spending, which surged up by 1.4 percent in September. Spending was expected to match the 1.0 percent jump seen in August.

A separate report from the University of Michigan showed consumer sentiment improved slightly more than initially estimated in the month of October.

The report showed the consumer sentiment index for October was upwardly revised to 81.8 from the preliminary reading of 81.2. Economists had expected the reading to be unrevised.

With upward revision, the consumer sentiment index is a bit further above the final September reading of 80.4.

Sector News

Retail stocks continue to see substantial weakness in mid-day trading, with the Dow Jones U.S. Retail Index plunging by 3.2 percent to its lowest intraday level in over a month.

Considerable weakness also remains visible among software stocks, as reflected by the 2.5 percent nosedive by the Dow Jones U.S. Software Index. The index has also fallen to a one-month low.

Natural gas stocks have also shown a significant move to the downside on the day, dragging the NYSE Arca Natural Gas Index down by 1.7 percent.

Range Resources (RRC) is leading the sector lower after reporting a wider than expected third quarter loss on revenues that came in below analyst estimates.

Semiconductor, housing and biotechnology stocks are also seeing notable weakness, while gold stocks are among the few groups bucking the downtrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Friday. Japan’s Nikkei 225 Index and China’s Shanghai Composite Index both tumbled by 1.5 percent, while South Korea’s Kospi plunged by 2.6 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index has risen by 0.2 percent, the U.K.’s FTSE 100 Index is down by 0.2 percent and the German DAX Index is down by 0.6 percent.

In the bond market, treasuries have moved modestly lower over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.7 basis points at 0.852 percent.

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