US stocks tumble as weak Chinese data rattles sentiment

NEW YORK (AFP) - US stocks sank deep in the red Friday as weak Chinese factory data and US home sales numbers outweighed Amazon’s unexpected blockbuster swing into profit.

The Dow Jones Industrial Average shed 163.39 points (0.92 per cent) at 17,568.53.

The broad-based S&P 500 dropped 22.50 (1.07 per cent) to 2,079.65, while the tech-rich Nasdaq Composite Index lost 57.78 points (1.12 per cent) at 5,088.63.

“Despite a blow-out earnings report from Internet kingpin and mostly better-than-expected results from some consumer stalwarts... an unexpected decline in US new home sales and a disappointing read on Chinese manufacturing output sapped sentiment,” said Charles Schwab & Co.

Falling crude oil prices pressured Dow members Chevron and ExxonMobil, down 2.5 per cent and 1.5 per cent, respectively.

Insurer Anthem sealed a US$54.2 billion (S$74.4 billion) deal to buy rival Cigna, in a further consolidation of the US health insurance industry in the wake of the US Affordable Care Act. Shares of both fell though: Cigna dived 5.6 per cent 2.9 per cent and Anthem 2.8 per cent.

Amazon shares rocketed 10 per cent after the company blew out expectations of a loss in the second quarter, reporting after the market closed Thursday a net profit of US$92 million and a 20 per cent jump in revenue from a year ago.

Amazon leapfrogged Wal-Mart Stores, the world’s biggest retailer, scoring a market value of US$247.04 billion compared with Wal-Mart’s US$230.53 billion. Walmart shares lost 1.3 per cent.

Other big tech names sank: Google shed 3.2 per cent, Apple fell 0.5 per cent and Dow member Intel lost 1.9 per cent.

Biogen plummeted 22.1 per cent after the biotech company lowered its 2015 forecast, largely blaming slower demand growth for multiple sclerosis treatment Tecfidera.

Other biotech shares felt the pressure: Amgen shed 3.4 per cent and Celgene lost almost 3 per cent.

On the Dow, Visa was one of three gainers. adding 4.3 per cent after its earnings beat expectations.

American Airlines plunged nearly 7 per cent percent after reporting record quarterly profit of US$1.7 billion for the April-June period and announcing a new US$2 billion share buyback programme.

AT&T rose 1.1 per cent after its US$49 billion acquisition of satellite broadcaster DirecTV won final regulatory approval, clearing the way for a new powerhouse in broadband and video services.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.26 per cent from 2.27 per cent Thursday, while the 30-year slipped to 2.96 per cent from 2.97 per cent. Bond prices and yields move in opposite directions.