Amazon sell-off ends dismal month for US shares

Amazon sell-off ends dismal month for US shares

NEW YORK (Agencies): US markets ended April in a deep funk, as investors turned their backs on once-favoured technology companies amid concerns about the economy.
A sell-off in Amazon shares, after the firm reported a fall in online sales, helped drive the Nasdaq index down more than 4% on Friday.
April was the worst month for the tech-heavy index since the 2008 financial crisis, with a 13% fall.
But the market downturn is not limited to tech stocks.
The wider S&P 500 logged it largest one-day decline since June 2020. It is down almost 14% since the start of the year.
The Dow Jones Industrial Average fell 5% in April and has dropped about 9% since January.
Markets – often considered a predictor of future economic health – have been jittery as a economic threats have mounted.
Inflation is raging at a multi-decade high in the US and elsewhere, driven by higher energy prices and the war in Ukraine.
Key supply chains have been affected both by the war, and by the on-going impact of the Covid pandemic, especially in China where lockdowns are still being used to limit the spread of the virus.
Apple has already warned that it expects a big hit to its business due to disruption in China. And Amazon, which profited from the pandemic boom in demand for home deliveries, has found that effect is now beginning to fade.
On Friday Amazon shares dropped 14%, after it reported sliding online sales and its first quarterly loss since 2015. Shares in smaller online shopping site Etsy fell more than 8%.
“Market participants are nervous to begin with, so there is a quick trigger when it comes to these names when there’s any uncertainty,” said Keith Buchanan, senior portfolio manager at Globalt Investments in Atlanta.
“When assumptions about these companies’ growth fail to materialize, then there’s definitely a ‘shoot first and ask questions later’ mentality.”
While consumer spending – the main driver of the US economy – has held up so far, there are growing worries that rising prices will make shoppers more careful, and could prompt a slowdown.
Earlier this week, the US reported its economy contracted by 0.4% in the first three months of the year. The European Union said Friday it had seen just 0.2% growth in the first quarter.

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