United States stocks slide, erasing gains from a rally a day earlier


Media and communications stocks, health care companies and banks also took heavy losses.

The Dow Jones Industrial Average lost 296.24 points, or 1.19%, to 24,688.31, the S&P 500 erased 47 points, or 1.74%, to 2,658.57 and the Nasdaq Composite fell 151.12 points, or 2.07%, to 7,167.21. Bond prices rose, sending yields lower, as investors seek less risky assets.

The S&P 500 lost 3.1 per cent to 2,656.10 and has lost about 9.4 per cent from its September 20 peak.

Companies began reporting their results for the third quarter last week.

Grim results late Thursday from Amazon.com Inc and Alphabet Inc, two stocks that have helped power the equity markets decade-long bull run, sparked the day's selloff and overshadowed data showing the USA economy continued to grow at a healthy clip. "That's causing some of this volatility".

Makoto Sengoku, market analyst at Tokai Tokyo Research Institute, said: "This mess of bad factors has made it hard for markets to seize a chance to turn up".

The Dow tumbled 608.01 points, or 2.4 per cent, to 24,583.42. The average was briefly down 539 points.

The tech-heavy index closed up 3%-its biggest one-day gain since March 26-coming off a 4.4% slide that marked its worst session since August 2011. On Thursday, Microsoft Corp's strong earnings led a rally that pulled the S&P and the Dow back into the black for 2018. But Asian markets took big losses, as the USA market did the day before.

While economic growth is mostly healthy, disappointing corporate results and forecasts this earnings season have shown how tariffs, rising wages and borrowing costs as well as jitters over geopolitical events are hurting companies.

Even so, traders are concerned about future growth amid rising inflation, interest rates and uncertainty over trade.

Top of the list is the U.S. trade war with China.

Amazon and Google parent company Alphabet slumped after both companies reported quarterly reported revenue figures that fell short of analysts' estimates.

On Friday, a US Commerce Department report showing stronger-than-expected annualised growth of 3.5% in the third quarter failed to bolster confidence, as analysts focused on weakness in exports, housing and business investment. The Nasdaq Composite shed more than 2%, and the S&P 500 ended down 1.7% after briefly dipping into correction territory. Recent data showing the housing market is slowing have also fueled speculation that USA economic growth will start to slow next year.

About 9.1 billion shares changed hands on USA exchanges.

On Wednesday, data showed sales of new USA single-family homes fell to a near two-year low in September, the latest sign that rising mortgage rates and higher prices were hurting demand for housing.

In other trading, benchmark United States crude lost 50 cents to Dollars 66.34 per barrel in electronic trading on the New York Mercantile Exchange. National Oilwell Varco lost 7.8 percent to $34.12.

Gold rose 0.1 percent to $1,232.40 an ounce. It's fallen 13.5 percent since the end of August and is down 2 percent so far this year.

In London, the FTSE 100 retreated, closing down 0.9% at 6,939.56. Netflix gave back 9.4 percent and Amazon dropped 5.9 percent.