* Amazon.com shares tumble after earnings disappoint
* January is worst month for Dow and S&P 500 since May 2012
* Dow off 0.9 pct; S&P 500 down 0.7 pct; Nasdaq off 0.5 pct
By Caroline Valetkevitch
NEW YORK, Jan 31 A selloff in emerging markets
sent a cold chill down Wall Street, triggering a slide on Friday
and making January its worst month since May 2012 after one of
its best years in more than a decade.
For January, the Dow tumbled 5.3 percent and the S&P 500
slid 3.6 percent - their worst monthly percentage declines since
The January loss followed the S&P 500's gain of 30 percent
in 2013 - its best year since 1997. It also marked the first
time that the S&P 500 ended January with a loss since 2010, when
the benchmark index started the year with a drop of 3.7 percent.
In Friday's session, energy and consumer discretionary
shares had the biggest declines of the day after some
disappointing earnings. The S&P energy index ended the
day down 1.5 percent, while the consumer discretionary index
fell 1.3 percent. Chevron Corp and Amazon.com
were among the biggest drags.
Trading was volatile during the session, with the Nasdaq
briefly edging into positive territory and the CBOE Volatility
Index - also known as the fear index - briefly turning
But selling accelerated, heading into the close. The VIX
shot up 6.5 percent to end Friday's session at 18.41. For
January, the VIX jumped 34 percent, its biggest monthly gain
since May 2012. The fear index hasn't traded above 19 since
"Given the concerns over the emerging markets and
currencies, I think most traders are tending to close down their
books so that they don't come in on Monday morning with a
negative surprise," said Quincy Krosby, market strategist for
Prudential Financial, which is based in Newark, New Jersey.
Global equity markets have been rattled by the outlook for
emerging markets, including slower growth in China, while the
Federal Reserve's decision this week to keep withdrawing its
monetary stimulus added to worries.
The Dow Jones industrial average fell 149.76 points
or 0.94 percent, to end at 15,698.85. The S&P 500 lost
11.60 points or 0.65 percent, to finish at 1,782.59. The Nasdaq
Composite dropped 19.25 points or 0.47 percent, to close
For January, the Nasdaq ended down 1.7 percent, its worst
monthly percentage loss since October 2012.
The blue-chip Dow underperformed the small-cap Russell 2000
index, which fell 2.8 percent in January, its worst month
For the week, the Dow fell 1.1 percent, the S&P 500 dipped
0.4 percent and the Nasdaq slipped 0.6 percent.
A selloff in emerging market currencies spurred some central
banks to raise interest rates or intervene in markets to limit
the swings, but investors worry it may not be enough to reverse
the trend. The Fed's removal of stimulus added to the concerns
because the extra liquidity has helped many of those markets.
Weighing on investor sentiment was data showing that
inflation in the euro zone slowed this month to 0.7 percent from
0.8 percent in December. That reading confounded expectations
for an increase to 0.9 percent and matched a low hit last
October. The European Central Bank responded by cutting its
interest rates to record lows.
Among the day's biggest decliners was Amazon.com, which fell
11 percent to close at $358.69, a day after the world's biggest
online retailer missed Wall Street's estimates for the crucial
holiday period. Amazon also cautioned investors about a possible
operating loss this quarter as shipping costs
Chevron's shares dropped 4.1 percent to end at $111.63,
their worst daily percentage decline since October 2012, after
the second-largest U.S. oil company said its fourth-quarter
profit dropped 32 percent as refining margins and production
fell around the world.
On the plus side, Google Inc's shares added 4
percent to close at $1,180.97 after the Internet search giant
reported quarterly revenue that beat Wall Street's target
despite an ongoing decline in prices for its online ads and
deepening losses at Motorola, the handset-making division to be
sold to China's Lenovo..
Zynga Inc shares jumped 23.6 percent to $4.40,
after the video game maker, known for its "Farmville" game, said
late Thursday that it will cut 15 percent of its workforce.
Volume was higher than the average for the month. About 7.8
billion shares changed hands on U.S. exchanges, compared with
the average of 6.9 billion for this month, according to data
from BATS Global Markets.
Decliners outnumbered advancers on both the New York Stock
Exchange and the Nasdaq by a ratio of about 2 to 1.