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US STOCKS-Wall Street falls as Amazon earnings disappoint

Fri 30th July, 2021 5:15pm
(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)
    * Amazon falls as sales growth slows
    * Pinterest sinks on saying U.S. user growth stalling
    * U.S. consumer spending rises in June, inflation increases
    * Indexes off: Dow 0.39%, S&P 0.53%, Nasdaq 0.68%

 (Updates to early afternoon)
    By Sagarika Jaisinghani
    July 30 (Reuters) - Wall Street's main indexes fell on
Friday following a glum quarterly earnings report from
Amazon.com, while data showing a strong rise in June consumer
spending reinforced optimism about a steady economic rebound.
    Amazon.com Inc  AMZN.O  sank 6.9%, tracking its worst day
since March 2020, after the company said sales growth would slow
in the next few quarters as customers ventured more outside the
home.  urn:newsml:reuters.com:*:nL4N2P53XQ
    Shares of other technology behemoths, including Apple Inc
 AAPL.O , Google-parent Alphabet Inc  GOOGL.O , and Facebook Inc
 FB.O , which benefited last year from people staying indoors
due to the COVID-19 curbs, fell between 0.6% and 1.8%.
    The S&P real estate index  .SPLRCR , generally considered a
defensive play, hit an all-time intra-day high.
    "Expectations across the board were quite high for corporate
earnings and the reason we are seeing some of the shares drop
despite positive results is because people expect exponential
growth, which, to be honest, is too high to expect," said Randy
Frederick, managing director of trading and derivatives at
Charles Schwab.
    By 12:06 p.m. ET, the Dow Jones Industrial Average  .DJI 
was down 0.39%, the S&P 500  .SPX  was down 0.53% and the Nasdaq
Composite  .IXIC  was down 0.68%.
    Hopes of a steady post-pandemic rebound in the U.S. economy
have put the benchmark index  .SPX  on course for its sixth
straight monthly gain, but the rapid spread of the Delta variant
and rising inflation have kept sentiment in check.  urn:newsml:reuters.com:*:nL1N2P52X7
    Data on Friday showed U.S. consumer spending rose more than
expected in June, although annual inflation accelerated further
above the Federal Reserve's 2% target.  urn:newsml:reuters.com:*:nL1N2P52DB
    Economically-sensitive stocks including industrials
 .SPLRCI , energy  .SPNY  and financials  .SPSY  fell, but for
the week, the so-called value stocks  .IVX  were set to
outperform growth-linked stocks  .IGX  such as technology.
    "We are bullish about cyclicals and consumer spending," said
Michael James, managing director of equity trading at Wedbush
Securities in Los Angeles.
    "Cyclical sectors are likely to continue to expand and
consumer spending is going to increase. Restaurants and
specialty retail are two areas for which we have a pretty
optimistic scenario."
    Pampers-maker Procter & Gamble Co  PG.N  rose 2.8% as it
forecast higher core earnings for this year, while U.S.-listed
shares of Canada's Restaurant Brands International Inc  QSR.N 
jumped 4.7% after the Burger King-owner beat estimates for
quarterly profit.  urn:newsml:reuters.com:*:nL4N2P62H0
    Pinterest Inc  PINS.N , however, plunged 19.2% to its lowest
in more than two months after saying U.S. user growth was
decelerating as people who used the platform for crafts and DIY
projects during the height of the pandemic were stepping out
more.  urn:newsml:reuters.com:*:nL4N2P53YE
    Caterpillar Inc  CAT.N  reversed course to fall 3.8%. The
company posted a rise in second-quarter adjusted profit on the
back of a recovery in global economic activity.  urn:newsml:reuters.com:*:nL4N2P62GU
    Overall, second-quarter results have come in from about half
of the S&P 500 companies, of which nearly 91% have beaten profit
estimates, according to Refinitiv data.
    Declining issues outnumbered advancers 1.48-to-1 on the NYSE
and 1.43-to-1 on the Nasdaq.
    The S&P index recorded 56 new 52-week highs and one new low,
while the Nasdaq recorded 67 new highs and 61 new lows.

 (Reporting by Sagarika Jaisinghani, Shashank Nayar and Sruthi
Shankar in Bengaluru; editing by Aditya Soni and Arun Koyyur)
 ((sagarika.jaisinghani@thomsonreuters.com;))
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