With Asian stocks retreating from recent highs and European tech shares opening sharply lower, an earnings miss by Amazon that hit U.S. technology stocks overnight rippled through into other markets on Friday.
As Amazon’s rapid and costly expansion into new shopping categories and countries showed no sign of slowing, it reported a slump in profits following which Amazon's stock tumbled over 2 percent on Thursday.
"It has been a pretty good season for earnings and this is the first big company that has sown a few doubts on that, and it also raises question on where the broader tech sector is headed from here," said Investec economist Victoria Clarke.
With a 40 percent rise up until Thursday, Amazon has been one of the companies powering the sector this year.
From a record low of 8.84 percent to an intra-day high of 11.5 percent, there was sharp rise in Wall Street's "fear index", the VIX, even though other U.S. sectors were resilient.
Along with Facebook, Netflix and Google, Amazon is one of the so-called "FANG" group of the most influential tech stocks. This is the reason that the impact of its setback has been broad and even the Asian shares were hit in addition to knocking the U.S. tech sector off recent highs.
With Samsung Electronics, Asia's largest company by market capitalization, dropping 3.5 percent, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8 percent.
Noting Europe’s worst-performing sector, the region’s tech index fell 1.4 percent in early trading on Friday.
"In terms of one story shaping sentiment it is quite remarkable, but markets are also a bit nervous ahead of U.S. GDP numbers due out today," said Investec's Clarke.
"The trigger was Amazon but developments overnight on U.S. healthcare has not helped sentiment."
In a stinging blow to President Donald Trump that may end the Republican Party's seven-year quest to repeal the Affordable Care Act, U.S. Senate Republicans failed early on Friday to overturn the healthcare law known as Obamacare.
Though second quarter U.S. economic growth data due later could potentially give it some respite from the recent sell-off, the dollar dipped against its major peers on Friday.
From 1.4 percent in the first quarter. The world's largest economy is expected to have grown about 2.6 percent in the second quarter, by economists.
The Swiss franc is on track to post its biggest weekly drop against the dollar for more than 22 months and was one of the biggest movers in the currency market.
As other central banks move towards tightening, investors bet the Swiss National Bank will keep monetary policy loose and this has bene the reason that the franc has been falling.
After key OPEC members pledged to reduce exports and the U.S. government reported a sharp decline in crude inventories, oil prices held near eight-week highs hit on Thursday.
(Source:www.reuters.com)
As Amazon’s rapid and costly expansion into new shopping categories and countries showed no sign of slowing, it reported a slump in profits following which Amazon's stock tumbled over 2 percent on Thursday.
"It has been a pretty good season for earnings and this is the first big company that has sown a few doubts on that, and it also raises question on where the broader tech sector is headed from here," said Investec economist Victoria Clarke.
With a 40 percent rise up until Thursday, Amazon has been one of the companies powering the sector this year.
From a record low of 8.84 percent to an intra-day high of 11.5 percent, there was sharp rise in Wall Street's "fear index", the VIX, even though other U.S. sectors were resilient.
Along with Facebook, Netflix and Google, Amazon is one of the so-called "FANG" group of the most influential tech stocks. This is the reason that the impact of its setback has been broad and even the Asian shares were hit in addition to knocking the U.S. tech sector off recent highs.
With Samsung Electronics, Asia's largest company by market capitalization, dropping 3.5 percent, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8 percent.
Noting Europe’s worst-performing sector, the region’s tech index fell 1.4 percent in early trading on Friday.
"In terms of one story shaping sentiment it is quite remarkable, but markets are also a bit nervous ahead of U.S. GDP numbers due out today," said Investec's Clarke.
"The trigger was Amazon but developments overnight on U.S. healthcare has not helped sentiment."
In a stinging blow to President Donald Trump that may end the Republican Party's seven-year quest to repeal the Affordable Care Act, U.S. Senate Republicans failed early on Friday to overturn the healthcare law known as Obamacare.
Though second quarter U.S. economic growth data due later could potentially give it some respite from the recent sell-off, the dollar dipped against its major peers on Friday.
From 1.4 percent in the first quarter. The world's largest economy is expected to have grown about 2.6 percent in the second quarter, by economists.
The Swiss franc is on track to post its biggest weekly drop against the dollar for more than 22 months and was one of the biggest movers in the currency market.
As other central banks move towards tightening, investors bet the Swiss National Bank will keep monetary policy loose and this has bene the reason that the franc has been falling.
After key OPEC members pledged to reduce exports and the U.S. government reported a sharp decline in crude inventories, oil prices held near eight-week highs hit on Thursday.
(Source:www.reuters.com)