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NEW YORK (AP) — Stocks stumbled on Wall Street, bringing the S&P 500 10% below the peak it reached in July and putting the benchmark index into what's called a “correction.”
The S&P 500 fell 0.5%, or 19.86 points, to close at 4,117.37 Friday and is now 10.3% below its July 31 high of 4,588.96. That marks its 10th loss in the last 12 days.
Stocks have fallen the past three months as investors face the reality of higher interest rates, with Federal Reserve officials talking about keeping rates “higher for longer” and the yield on the 10-year Treasury reaching levels not seen since 2007. Analysts say investors are also concerned near-term about an escalation of tensions in the Middle East and the strength of company earnings.
The Dow Jones Industrial Average fell 366.71 points, or 1.1%, to 32,417.59. The Russell 2000 index of smaller company stocks slipped 20.07 points, or 1.2% to 1,636.94, its lowest level in about four years.
The Nasdaq was the bright spot in the market, gaining ground on the strength of several big technology and communications companies that reported solid earnings. The index rose 47.41 points, or 0.4%, to 12,643.01.
Amazon rose 6.8% following its profit report. Both its profit and revenue for the summer were better than expected. As one of the most massive companies on Wall Street, Amazon’s stock movements carry huge weight on the S&P 500 and other indexes.
It’s one of the “Magnificent Seven” Big Tech stocks that was responsible for much of the stock market’s climb early this year. But those huge gains also meant big expectations built for them, and Alphabet, Meta and Tesla all fell sharply following their latest reports.
Intel, which is outside the Magnificent Seven, was also helping to support the market. It rose 9.3% after reporting much stronger profit for the summer than analysts expected.
Those gains weren’t enough to counter broad declines in health care, energy and financial services stocks. Investors also dealt with mixed readings on the economy.
Several big companies slipped after reporting disappointing earnings for their latest quarters. Exxon Mobil fell 1.9% after reporting a bigger drop in profits than Wall Street expected. Chevron fell 6.7% after also falling short of analysts’ profit forecasts.
Ford stumbled 12.2% after reporting disappointing earnings and revenue a day after it reached a tentative contract agreement with the United Auto Workers union.
The market has been unforgiving when it comes to the latest round of corporate earnings, though they have mostly been solid, said Quincy Krosby, chief global strategist for LPL Financial. Analysts polled by FactSet expect earnings growth of about 2.4% overall for companies in the S&P 500.