Stocks ease on earnings results

Written By kolimtiga on Jumat, 25 Juli 2014 | 22.25

The stock market sank in early trading Friday after Visa and Amazon posted weaker results than Wall Street expected. If the declines continue, the market would erase almost all of its gains from earlier in the week.

The stock market sank in morning trading Friday after Visa and Amazon posted weaker results than Wall Street expected. If the declines continue, the market would erase almost all of its gains from earlier in the week.

KEEPING SCORE: The Dow Jones industrial average lost 117 points, 0.7 percent, to 16,966 as of 11 a.m. Eastern time. The Standard & Poor's 500 index fell seven points, or 0.4 percent, to 1,981 and the Nasdaq composite dropped 24 points, or 0.5 percent, to 4,447.

For the week, the S&P 500 is down fractionally, 0.02 percent, and the Dow is off 0.9 percent.

MISSED: Amazon's stock slumped 11 percent after the online retail giant posted a much wider loss than analysts had forecast, hit by expenses. The Seattle-based company is focused on spending the money it makes to expand into new areas and products, including a smartphone, the Fire, which starts selling Friday. Amazon was down $40.60 to $318 in early trading.

NOT EVERYWHERE: Dow member Visa fell $11, or 5 percent, to $212.98. The credit card processing giant said profits rose 11 percent from a year earlier, but the company cut back its full-year forecast on concerns about growth overseas. Visa is a closely watched company because of its heavy exposure to U.S. and global consumer spending.

`COMPLACENCY': "I continue to see the level of complacency in the (stock) market to be unnerving, to be honest," Scott Clemons, chief investment strategist at Brown Brothers Harriman, which manages $25 billion in assets for private investors. "All of this geopolitical tension, the market trading near all-time highs, I think the market is at a critical state right now."

Clemons said he doesn't believe the market is poised for a major sell-off, but instead thinks investors should brace for more volatility and more heavy-handed reaction to disappointing earnings or data, like Friday's Amazon and Visa results.

THE GOODS: Orders for long-lasting manufactured goods rebounded in June, helped by rising demand for commercial aircraft and machinery. The Commerce Department said that orders for durable goods rose 0.7 percent last month, which is what economists expected. Economists expect activity will pick up in the latter half of the year.

BONDS AND OIL: The yield on the 10-year Treasury note eased to 2.48 percent from 2.50 percent late Thursday. Bond yields fall when prices rise. Benchmark U.S. crude oil fell 55 cents to $101.51 a barrel on the New York Mercantile Exchange

Copyright © 2014, Los Angeles Times

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