By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market opened lower on
Friday, weighed down by disappointing earnings from companies such
as Amazon.com.
Nonetheless, the main benchmarks were on track to finish the
week with marginal gains.
Stock-market investors showed virtually no reaction to
stronger-than-expected orders for durable goods, released before
the opening bell.
The S&P 500 (SPX) opened 9 points, or 0.4%, lower at
1,980.96, retreating from the record close reached on Thursday.
The Dow Jones Industrial Average (DJI) lost 117 points, or 0.7%,
to 16,965.02 at the open.
The Nasdaq Composite (RIXF) began the session 30 points, or
0.7%, lower at 4,441.20, weighed down by Amazon.com and Pandora,
both tumbling 12%.
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action.
Investors were disappointed with Amazon.com(AMZN) and a
wider-than-expected second-quarter loss late Thursday. Shares
plunged 11%. Also read: Is Amazon spending like a drunken
sailor?
Pandora Media(P) dived 9%, after the Internet-based radio
company posted wider losses late Thursday.
Starbucks Corp.(SBUX) was another loser, off 3%. The company
posted a 22% profit rise and lifted its outlook. But some viewed
its 2015 outlook as cautious.
Xerox (XRX) shares fell 2.7%. Second-quarter earnings fell as
revenue from its document-technology business continued to
fall.
The day's trading debuts include fast-food chain El Pollo
Loco(LOCO), which priced shares at $15, the top of the range.
Investors will also be watching Cynk Technology (CYNK), which
will resume trading after the Securities and Exchange Commission
suspended trading in the stock earlier this month.
Orders for durable U.S. goods rose 0.7% in June amid gains in
most categories, the Commerce Department said. Economists surveyed
by MarketWatch had expected durable-goods orders to rise 0.2%.
However, the report is often volatile, with swings reported from
one month to the next.
Next week has the potential to be big for economic news, with a
Federal Open Market Committee meeting and the monthly jobs report
topping a long list of data on the docket.
Some analysts said markets could make slow progress on Friday,
given investors may be nervous about the potential for more
geopolitical tensions from Russia or Gaza through the weekend.
Read: U.S. says Russian artillery firing into Ukraine.
The S&P 500 (SPX) closed on Thursday at an all-time high for
the 27th time this year, but the Dow industrials (DJI) and Nasdaq
Composite (RIXF) both ended the day slightly lower.
Naeem Aslam, chief market analyst at AvaTrade, said U.S. indexes
have started to show signs of divergence.
"Technically speaking, when indexes have a divergence between
them, it is an early sign of correction, and under the situation
when one index is moving up and the rest moving in the opposite
direction, it is like smoke coming out before the fire," said Aslam
in emailed comments.
European stocks drifted into the red on Friday, with German
stocks under pressure after weaker-than-expected German Ifo
business sentiment data. The blue-chip MICEX in Russia fell 1.5%.
Russia's central bank hiked interest rates on Friday, citing
geopolitical tensions and the potential impact on the ruble and
rising inflation as reasons. The European Commission submitted
proposals on new sanctions for Russia linked to the Ukraine crisis
on Thursday.
In Asia, the Nikkei 225 index rallied more than 1% on Friday to
the highest settlement in six months, as the yen weakened and
domestic inflation data met market expectations. China's Shanghai
Composite also put on a strong performance, up 1.1%.
Crude oil (CLU4) was flat, and gold (GCU4) was slightly higher.
The euro (EURUSD) fell against the dollar after the weak German Ifo
data.
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