Weak earnings and a drop in tobacco shares pulled the S&P 500 lower Friday. But the Dow again eked out a gain. Fred Katayama reports.
Investors reacted negatively to disappointing report cards from high-profile names like Amazon and Starbucks, sending the S&P 500 and Nasdaq lower on Friday. Global Markets Advisory Group's Peter Kenny: SOUNDBITE: PETER KENNY, SENIOR MARKET STRATEGIST, GLOBAL MARKETS ADVISORY GROUP, (ENGLISH) SAYING: "The bottom line is valuations are frothy. And any miss or perception of a miss is going to trigger money out of those names." Amazon shares dropping after reporting a 77 percent decline in quarterly profit. Sales growth was high, but so too was spending for expansion into new categories. Shares of fellow Seattlite Starbucks also suffering. The world's largest coffee chain's profit fell. It cut its earnings forecast and said it'll close all 379 of its Teavana stores over the coming year. Big Tobacco getting smoked. Shares of Altria and British American dropped sharply after regulators said they seek to cut nicotine level in cigarettes. U.S. economic growth revved up. It expanded at a 2.6 percent pace in the second quarter, more than double that of the first three months. In Europe, the FTSE and CAC shed more than 1 percent. Energy among the sole bright spots in a broad-based decline on the Continent.