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US STOCKS-Wall Street weighed by results as Amazon, Visa disappoint
July 25, 2014 / 4:50 PM / 3 years ago

US STOCKS-Wall Street weighed by results as Amazon, Visa disappoint

* Durable goods data better than expected

* Amazon shares tumble after larger-than-expected loss

* Baidu jumps as net profit soars

* Indexes down: Dow 0.75 pct, S&P 0.47 pct, Nasdaq 0.58 pct (Updates prices, adds to comment)

By Rodrigo Campos

NEW YORK, July 25 (Reuters) - Disappointing earnings from Amazon and Visa dragged U.S. stocks lower in afternoon trading on Friday in a broad selloff led by consumer discretionary shares.

Amazon tumbled 10.3 percent to $320.70 after reporting an unexpectedly big loss for the second quarter, citing greater expenses on investments. With more than 7 million shares changing hands in the first 45 minutes of trading, volume was already above the average for the past 10 days.

“Earnings have been the driving force of this market all week. We had a series of good reports but Amazon in particular was a disappointment and has led to some profit taking,” said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

Amazon dragged on the consumer discretionary sector , which lost 1.1 percent.

Visa was the largest decliner on the Dow index, with a 4.2 percent drop to $213.32 after the world’s largest credit and debit card company cut its revenue forecast for the year.

The blue-chip index was down nearly 130 points, and Visa - the costliest stock in the price-weighted index - accounted for more than half the drop.

“Consumer demand continues to be problematic for most companies,” said Meckler. “They’ve managed to adjust to it through cost savings but at this level in the market you will need a more robust consumer demand to keep the rally going.”

The Dow Jones industrial average fell 128.61 points or 0.75 percent, to 16,955.19, the S&P 500 lost 9.25 points or 0.47 percent, to 1,978.73 and the Nasdaq Composite dropped 26.13 points or 0.58 percent, to 4,445.97.

The market didn’t react to data showing orders for long-lasting U.S. manufactured goods rose more than expected in June, supporting hopes for a strong economic rebound in the second quarter.

Starbucks fell 2.1 percent to $78.76 even as quarterly sales at established stores in its Americas region grew a stronger-than-expected 6 percent.

Pandora Media dropped 13.4 percent to $24.87 after it forecast adjusted profit below analysts’ estimates for the current quarter.

On the upside, Baidu shares surged 8.7 percent to $222.00 after China’s biggest Internet search company blew past Wall Street’s targets with a 34.1 percent jump in quarterly net profit, helped by a surge in mobile revenue. (Editing by Bernadette Baum)

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