The impact from the stellar results from Apple and Facebook didn’t last long – a day at most – on Wall Street with a sell-off on Friday led by the tech-heavy stocks in the Nasdaq and other markets leading the way down.
Fears about tech company valuations, plus the continuing tensions over Ukraine, combined to send US markets lower.
That saw gold rise on Friday and for the week, although oil prices sold off.
In turn our market will open lower this morning, according to futures market trading on Saturday morning, our time.
The losses in New York were nastiest on Nasdaq which fell almost 73 points, or 1.8%, to finish at 4,075.56. That left it down half a per cent for the week.
Topping the list of losers was Facebook shares which fell more than 5%, Nextflix shares which ended 6% lower and shares in Yahoo, down 2%.
Apple shares rose 0.7%, while Microsoft shares were up 0.1% and were among the few tech stocks to end the day higher in New York trading.
The Dow lost 140 points or 0.8% on the day and 0.3% for the week, while the S&P 500 fell 0.8% as well, to be down by around 0.1% for the week.
That meant the 1.4% rise in the Australian market in three days trading represented considerable outperformance.
But it won’t last with the nervous nellies pushing the share price futures contract down 23 points by the close early Saturday morning, meaning a lower start to local trading later today.
Amazon shares sank 9.9% to $303.83 on Friday night after the internet company reported earnings after the close of the Thursday trading session.
Amazon reported a small profit on a 23% rise in sales for the quarter, but management warned of a loss this quarter from higher spending on new products and the shares sank, taking the year’s loss so far to 35%.
Established stocks Ford and Visa both fell, taking the Dow down with them.
Visa Inc shares fell 5% in the wake of the release of the financial services company’s earnings.
CEO Charles Scharf said the firm expects “slightly more pronounced” difficulties in year-over-year comparisons next quarter due to the effects of a strengthening dollar.
He also said the tensions in Russia and the sanctions so far introduced were impacting Visa’s business.
Given that Visa is the highest-priced component in the Dow Average, which weights stocks according to their prices, Visa’s fall helped the index close down 140 points.
Ford shares dropped 3.3% despite reporting reasonably strong earnings which were overshadowed by higher warranty costs.
That led investors to think the company faces further earnings pressures, much like those General Motors is facing over vehicle recall and repair costs.
Shares in online music streaming business Pandora Media Inc plunged 17% despite reporting better-than-expected revenues and a narrower first-quarter loss late on Thursday.
Investors didn’t like the weak earnings outlook from management.
Fuel cell maker Plug Power Inc saw its shares shed 11% after the company announced the terms of a secondary stock offering.
Markets in Europe also fell, with the German DAX 30 index down 1.5%.
Across other markets Hong Kong’s Hang Seng fell 1.5% on Friday and the Shanghai Composite lost 1% to be down 2.9% over the week. Japan’s Nikkei fell 0.9% as well.
So Australia’s 1.4% gain stood out, despite continuing weakness in the price of iron ore which may return to damage confidence this week, especially with the two monthly surveys of Chinese manufacturing activity out on Thursday and likely to again disappoint.
The ASX 200 Index rose 38.49 points, or 0.7%, to 5517.8 on Thursday, while the All Ordinaries Index ended up 35.06 points, or 0.6% to 5507.8. It was the ASX 200’s highest level since the May 2008 rally.
But given the fears about the escalation of tensions in Ukraine, and more western sanctions against Russia, the fall the futures market has tipped for the ASX 200 today might be the start of increased market volatility.
Certainly the renewed fears about the valuations in the US tech and biotech sector shouldn’t really worry investors here.
But Ukraine adds an expanding unknown to factors affecting investor confidence and share prices.
Will the ANZ’s Bank’s interim results be enough to hold the fort here?
