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US stocks tumble amid tech selloff

Oct 28 2018 11:01

New York - Wall Street was back in aggressive sell-off mode on Friday, with major stock indices losing more than two percent following disappointing earnings announcements from Amazon and Google parent Alphabet.

Near 15:10 GMT, the tech-rich Nasdaq Composite Index was down 3.1% at 7 088.58.

The Dow Jones Industrial Average fell 1.8% to 24 538.65 after earlier losing more than 2.0%, while the broad-based S&P 500 shed 2.4% to 2 639.52.

Both Amazon and Alphabet reported big jumps in quarterly profit but Amazon's sales forecast for the critical holiday-shopping quarter disappointed analysts. Alphabet's revenues in the just-finished quarter also lagged analyst forecasts.

Amazon plummeted 9.2% while Alphabet slumped 4.8%.

US government data, meanwhile, estimated third-quarter growth at a solid 3.5%, below the pace of the prior 4.2% quarter but better than expected.

Friday's weakness on Wall Street pushed the market back into the red where it has been for much of October, due in part to fears US corporate earnings have peaked following the one-time surge from the 2017 tax cut legislation.

Bill Lynch, director of investments at Hinsdale Associates, noted most of the companies reporting earnings had bested expectations.

"It should be enough to stabilize the markets but the market is more forward-looking," he said.

Other factors adding to investor unease include uncertainty about the upcoming US midterm elections, fallout from the US trade conflict with China and a budget standoff between Italy and the European Union, Lynch said.

Among other companies reporting results, Colgate-Palmolive slid 5.5% after reporting a 13.8% drop in third-quarter profits to $523m due to the strong US dollar and a jump in raw material costs.

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