U.S. Stocks Showing Substantial Pullback After Yesterday’s Rally

Stocks have moved sharply lower over the course of morning trading on Friday, partly offsetting the substantial rally seen in the previous session. The major averages staged a recovery attempt after seeing initial weakness but have shown a significant pullback since then.

The major averages have seen further downside in recent trading, hitting new lows for the session. The Dow is down 394.55 points or 1.2 percent at 33,521.84, the Nasdaq is down 207.97 points or 1.6 percent at 12,663.56 and the S&P 500 is down 69.57 points or 1.6 percent at 4,217.93.

A negative reaction to the latest batch of earnings news has contributed to the sharp pullback on Wall Street, with shares of Amazon (AMZN) plunging by 12.5 percent to their lowest intraday level in almost two years.

The steep drop by Amazon comes after the online retail giant reported an unexpected first quarter loss and provided disappointing revenue guidance for the current quarter.

Semiconductor giant Intel (INTC) has also tumbled by 6.1 percent after reporting first quarter results that exceeded analyst estimates but issuing weak guidance for the second quarter.

Shares of Apple (AAPL) have also moved to the downside after the tech giant reported better than expected fiscal second quarter earnings but warned supply chain issues would hurt third quarter sales by as much as $8 billion.

Lingering concerns about inflation, higher interest rates and the ongoing war in Ukraine may also have inspired some traders to cash in on yesterday’s strong gains.

On the U.S. economic front, a report released by the Commerce Department showed U.S. personal income increased by slightly more than expected in the month of March, while U.S. personal spending jumped by much more than anticipated.

The Commerce Department said personal income rose by 0.5 percent in March after climbing by an upwardly revised 0.7 percent in February.

Economists had expected personal income to rise by 0.4 percent compared to the 0.5 percent increase originally reported for the previous month.

The report also showed personal spending jumped by 1.1 percent in March after advancing by an upwardly revised 0.6 percent in February.

Personal spending was expected to increase by 0.7 percent compared to the 0.2 percent uptick originally reported for the previous month.

Meanwhile, a reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth slowed to 5.2 percent in March from 5.3 percent in February.

Retail stocks are seeing substantial weakness amid the steep drop by Amazon, with the Dow Jones U.S. Retail Index plunging by 5.9 percent to its lowest intraday level in over a year.

Significant weakness has also emerged among telecom stocks, as reflected by the 2.3 percent slump by the NYSE Arca North American Telecom Index. The index has fallen to a one-month intraday low.

Commercial real estate stocks are also seeing considerable weakness on the day, dragging the Dow Jones U.S. Real Estate Index down by 2.3 percent.

Oil service, semiconductor and utilities stocks have also shown notable moves to the downside, while gold stocks are moving higher along with the price of the precious metal.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday, with the Japanese markets closed for a holiday. China’s Shanghai Composite Index shot up by 2.4 percent, while Hong Kong’s Hang Seng Index soared by 4 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index is up by 0.8 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both up by 0.4 percent.

In the bond market, treasuries have shown a notable recovery attempt after coming under pressure in early trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is 1.6 basis points at 2.879 percent after reaching a high of 2.934 percent.

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