Weak results from Amazon eroded sentiment as North American stock markets fell to end a dismal April, with Canada’s main index posting its fifth consecutive month of decline.
“Today is really about Amazon and reading about corporate earnings and economic growth,” said Anish Chopra, managing director of Portfolio Management Corp.
The biggest retailer reported a rare loss, which sent its shares tumbling 14% as investors were disappointed with its earnings forecast which pointed to a potential slowdown in consumer spending.
The US tech sector was particularly hard hit, with the Nasdaq composite suffering its biggest monthly loss since the 2008 financial crisis. The S&P 500, which includes so-called large-cap FANG stocks – Facebook, Apple, Netflix and Google – ended its weakest month since the start of the pandemic.
The backdrop includes cross-currents with rising interest rates, monetary tightening by central banks, persistently high inflation, COVID-19 spikes in China and war in Ukraine.
“So I think Amazon has certainly crystallized investor concerns about the growth prospects and earnings prospects of the US megacap tech names,” he said in an interview.
Amazon’s quarterly report reversed sentiment from the previous day in response to Facebook’s parent meta-platforms beating expectations by posting healthy earnings.
The S&P/TSX Composite Index closed down 359.06 points or 1.7% at 20,762.00. It lost 2% for the week and 5.4% in April.
In New York, the Dow Jones industrial average was down 939.18 points to 32,977.21. The S&P 500 index fell 155.57 points to 4,131.93, while the Nasdaq composite fell 536.89 points or 4.2% to 12,334.64.
All 11 major sectors on the TSX were down, with nine losing at least one percent.
Industrials lagged the most, falling 2.8% as shares of NFI Group Inc. plunged 15% after the bus maker cut its revenue forecast for the second time in seven months, citing a worldwide shortage of microprocessors.
Real estate fell 2.7% and technology fell 2.5%, Hut 8 Mining Corp. down 5.4% and Shopify Inc. down 3.3%.
The energy sector was weaker as crude oil prices fell slightly, but natural gas futures rose more than 5%. Shares of Baytex Energy Corp. lost 7.6% while Cenovus Energy Inc. lost 4.4%.
The June crude contract was down 67 cents at US$104.69 per barrel and the June natural gas contract was up 35.6 cents at US$7.24 per mmBTU.
The Canadian dollar was trading at 78.17 cents US against 77.95 cents US on Thursday.
Eldorado Gold fell 7.8% on lower materials, even as bullion prices were higher.
The June gold contract was up US$20.40 at US$1,911.70 an ounce and the July copper contract was down 2.5 cents at US$4.41 per pound.
May will start next week with corporate earnings from retailers like Starbucks, U.S. consumer spending, a jobs report for April and a Federal Reserve meeting at which interest rates are expected to be raised, a said Chopra.
“Certainly investors are worried about whether the Fed will act faster than investors might anticipate, so I think investors will be really tuned in to hear what the Fed is saying and tuned in to what the Fed is saying. what the Fed will actually do next week. »
This report from The Canadian Press was first published on April 29, 2022.