U.S. equities and stock ETFs continued to fall Friday as a technology sell-off worsened on weak results from e-commerce giant Amazon (NasdaqGS: AMZN).
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEARCA: SPY), iShares Core S&P 500 ETF (NYSEARCA: IVV) and Vanguard 500 Index (NYSEARCA: VOO), were 0.2% lower Friday.
The lackluster earnings from consumer companies, including Amazon, pressured markets, following a sharp sell-off in the technology sector in the previous session.
“There’s been such an enormous run-up in tech that these stocks are vulnerable to any disappointment,” Russ Koesterich, co-portfolio manager of the BlackRock Global Allocation Fund, told the Wall Street Journal, opining that the question now is if investors sell their positions in tech shares, what assets or sectors will they move that money into.
Amazon revealed quarterly profits fell 77% due to its rapid and costly expansion into new shopping categories and countries showed no sign of slowing, exacerbating the downbeat tone around internet and technology companies.
Consumer companies in the S&P 500 were among the worst performers Friday, declining 0.7%.
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Risk sentiment also receded following the failure of Republicans’ attempt to repeal the Affordable Care Act, or so-called Obamacare, in a tight Senate vote overnight, Reuters reports. Investors have closely monitored the bill as an indicator for President Donald Trump’s ability to legislate his pro-growth agenda, like tax reform and increased infrastructure spending.
“When a lot of people think about the White House, they just think of a lot of chaos going on, and if they can’t get stuff together in their own house, how are they going to get it together for the country. What kind of outlook does that have for things like tax reform?,” Robert Pavlik, chief market strategist at Boston Private Wealth, told Reuters.
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