Wall Street falls on Amazon, Visa results

By Ryan Vlastelica

NEW YORK (Reuters) - U.S. stocks fell on Friday in a broad consumer discretionary-led selloff after Visa and Amazon, a pair of closely watched bellwether names, reported disappointing results.

Earnings season has largely come in better than expected, with more companies than usual beating analyst expectations for both profits and revenue. However, there have been high-profile disappointments including Boeing Co and Caterpillar Inc earlier this week.

Amazon.com Inc tumbled 10.3 percent to $320.70 in its biggest one-day decline since January after reporting an unexpectedly wide second-quarter loss, citing greater expenses on investments. The stock was the S&P 500's biggest decliner, and almost 15 million shares traded hands, many times its 50-day average of 3.6 million.

 

The online retailer dragged on the consumer discretionary sector, which lost 1.1 percent.

Visa Inc was the Dow's largest decliner, down 3.8 percent to $214.25 after the world's largest credit and debit card company cut its revenue forecast for the year. As the costliest stock in the price-weighted index, Visa accounted for more than half the Dow's drop.

"The earnings season overall has been in-line, but when companies with rich valuations disappoint, you're going to get crucified," said Lawrence Glazer, managing partner at Mayflower Advisors in Boston. "Amazon and Visa are significant components of the overall market and bellwethers of their respective industries. That gives you pause."

Only two of the 10 primary S&P 500 industry sectors were positive on the day, while more than 60 percent of stocks traded on both the New York Stock Exchange and the Nasdaq fell.

The Dow Jones industrial average fell 133.96 points or 0.78 percent, to 16,949.84, the S&P 500 lost 9.82 points or 0.49 percent, to 1,978.16 and the Nasdaq Composite dropped 23.65 points or 0.53 percent, to 4,448.46.

For the week, the Dow is down 0.9 percent, the S&P is flat and the Nasdaq is up 0.4 percent and on track for its second straight weekly rise.

The market did not react to data showing orders for long-lasting U.S. manufactured goods rose more than expected in June, supporting hopes for a strong economic rebound in the second quarter.

Starbucks fell 2.1 percent to $78.76 even as quarterly sales at established stores in its Americas region grew a stronger-than-expected 6 percent.

Pandora Media dropped 11.5 percent to $25.40 after it forecast adjusted profit below analysts' estimates for the current quarter.

On the upside, Baidu was up 10 percent to $224.71. China's biggest Internet search company blew past Wall Street's targets with a 34.1 percent jump in quarterly net profit, helped by a surge in mobile revenue.

El Pollo Loco Holdings Inc shares surged 52 percent to $22.77 in their trading debut after the company's initial public offering was priced at the high end of an expected range.

(Editing by Nick Zieminski)