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The stock market was mostly lower Friday after Apple and Amazon.com reported disappointing quarters, driven by supply chain constraints and higher costs. That brought their stocks—and the major indexes—down.
Shortly after the open, the
Dow Jones Industrial Average
was up 34 points, or 0.1%, after the index climbed 239 points Thursday to close at 35,780. The
S&P 500
and
Nasdaq Composite
—which both hit record highs at the close Thursday— dipped 0.4% and 0.7%, respectively.
Apple
(ticker: AAPL) stock fell 3.5% after the company reported a profit of $1.24 a share, in line with estimates, on sales of $83.4 billion, below expectations for $84.9 billion. The company said supply chain constraints due to chip shortages were worse than expected. iPhone sales were $38.9 billion, below expectations for $41.5 billion.
Amazon
(AMZN) stock dropped 4.8% after the company reported a profit of $6.12 a share, missing estimates of $8.92 a share, on sales of $110.8 billion, below expectations for $111.6 billion. The company said labor shortages, higher shipping costs and other rising expenses are eating into profits. Management also guided for current quarter sales of $135 billion at the midpoint of its range, below analysts’ expectations for $142 billion.
“On earnings, AAPL and AMZN both underwhelmed investors and those stocks fell 3% and 5% after hours and the sheer weight of those names in the S&P 500 is weighing on the entire index, wrote Tom Essaye, founder of Sevens Report Research.
While Big Tech pulled the the major indexes down, many stocks were rising. The
Energy Select Sector SPDR Fund
(XLE) gained 0.8% as the price of oil rose. Bank stocks were largely on the rise, as long-dated bond yields rose faster than yields short-dated debt, which makes banks more profitable.
Overseas, the
Shanghai Composite
rose 0.8%, outperforming other Asian indexes. Sentiment was buoyed by news that embattled and highly indebted property developer China Evergrande (3333.H.K.) had made payment on an offshore bond coupon just before the hard deadline—staving off formal default for…
Read More: Stock Market Today: S&P 500, Nasdaq Slip After Apple and Amazon Woes