Business Traders work on the floor of the New York Stock Exchange. (Photo: REUTERS/Brendan McDermid) 28 Jul 2018 05:44AM(Updated: 28 Jul 2018 05:50AM) Share this content
NEW YORK: Wall Street stocks finished decisively lower on Friday (Jul 27) after a blowout second-quarter US growth report on worries the economy has peaked.
The tech-rich Nasdaq Composite Index suffered the most of the major indices, shedding 114.77 points (1.46 per cent) to close the week at 7,737.42.
The Dow Jones Industrial Average shed 76.01 points (0.30 per cent) to end at 25,451.06, while the broad-based S&P 500 dropped 18.62 points (0.66 per cent) to 2,818.82.
Friday’s losses also were prompted by a largely disappointing round of earnings, with Exxon Mobil, Intel and Twitter all falling significantly.
US growth expanded by an annual rate of 4.1 per cent, matching analyst expectations, due in part to strong consumer spending, according to Commerce Department data.
The growth rate was the strongest it has been since the third quarter of 2014.
Stocks opened in a muted fashion following the report but began veering into negative territory soon thereafter.
“There’s a general sense that maybe we’re hitting peak growth,” said Jack Ablin of Cresset Wealth Advisors.
Ablin said the tech sector was vulnerable because it is tied more closely to growth than some sectors and because of worries that rising political and social scrutiny of Facebook and others that could crimp growth.
Beyond that, technology has been a leader in the overall bull market over the last few years and weakness in that segment are likely seen as a harbinger of broader problems.
One day after Facebook dived on a weak outlook, fellow social media company Twitter plummeted 20.5 per cent as it reported a lower