Wall St loses over $200 billion in value after report from Amazon
2022.10.27 18:45
© Reuters. Amazon logo is seen in front of a decreasing stock graph in this illustration taken April 29, 2022. REUTERS/Dado Ruvic/Illustration
By Noel Randewich and Lewis Krauskopf
(Reuters) – Over $200 billion in U.S. stock market value went up in smoke in extended trade on Thursday, after a weak forecast from Amazon (NASDAQ:) added to a string of downbeat quarterly reports from Big Tech companies.
Amazon’s stock tumbled 17% after the bell, wiping out $190 billion in market capitalization after the retail and technology heavyweight projected a holiday slump that would leave current-quarter sales below Wall Street estimates.
Also after the bell, Apple shares (NASDAQ:) fell about 1%, erasing about $30 billion of its stock market value after the Cupertino, California company reported quarterly iPhone sales that fell short of Wall Street targets.
The latest in a string of poor quarterly results from some of Wall Street’s most widely owned companies underscores deep worries about the health of the global economy as central banks raise interest rates in a battle against inflation.
“Big Tech companies are not impervious to slowdowns in the economy, particularly if they are consumer driven,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.
“As the Fed embarks on this planned slowdown, it is eating away at some of their consumer-faced businesses, and given their high multiples it is causing big contractions in their stock prices,” Meckler said.
Amazon’s weak report sent Nasdaq futures tumbling about 3%, showing traders expect Wall Street to open with a deep decline on Friday. Google-owner Alphabet (NASDAQ:) and Microsoft (NASDAQ:) dropped about 1% each, adding to losses following their own poorly received quarterly reports on Tuesday.
Thursday’s late-day reports also followed disappointing results from Facebook-owner Meta Platforms that earlier sent its stock plummeting 25%. Thursday’s drop left Meta’s stock market value at about $260 billion, with the one-time behemoth now about the 20th most valuable company on Wall Street.
If Amazon’s drop after hours is reflected in Friday’s trading session, it will have been its deepest one-day loss since 2006.
Among a handful of winners late on Thursday, Pinterest (NYSE:) surged 12% after the social media platform reported higher than expected quarterly revenue, while Intel (NASDAQ:) climbed 6%, despite forecasting annual revenue below analysts’ estimates.
