S&P 500 Follows Nasdaq into Correction Territory as Tech is Trounced

The technology sector continues to get trounced as the S&P 500 followed the Nasdaq Composite into correction territory, falling as much as 10% from its 52-week high. Third-quarter results from the likes of Amazon and Google showed better-than-expected earnings, but missed on revenue.

The Nasdaq Composite was down over 200 points Friday as the once-heralded FANG (Facebook, Amazon, Netflix, Google) stocks have been languishing amid October’s sell-off. On Wednesday, the Nasdaq experienced its worst loss since August 2011 as companies like Texas Instruments and AT&T reported weak third-quarter results.

“You can’t just say tech is going to do great or even that FANG is going to do great. You have to be more selective,” said Daniel Morgan, senior portfolio manager with Synovus Trust Company.

Amazon reported better-than-expected earnings, but shares of the online retailer fell after hours by as much as 8% and another 8% to start Friday’s trading session as of 11:00 a.m. ET.

Amazon’s earnings per share came in at $5.75 versus forecasts of $3.14, according to Refinitiv. However, revenue generated came in at $56.6 billion as opposed to the estimated $57.10 million expected by analysts.

Adding fuel to the revenue miss flame was a weaker-than-expected fourth-quarter guidance, which came in between $2.1 billion and $3.6 billion–under the $3.8 billion estimate. Earlier this month, Amazon announced it would increase minimum wage to $15 per hour for all U.S. workers, which it factored into its fourth-quarter revenue guidance.

Amazon’s total revenue climbed 29% as opposed to last year with sales up in North America by $34.3 billion or 35% from last year. Additionally, international sales were 13% higher than last year to $15.5 billion.

“Amazon continued to demonstrate that its various investments are resonating with its very broad and fast-growing customer base, with impressive results across the board,” Charlie O’Shea, Moody’s lead retail analyst, said in a statement.