Correction Blues as Stocks Post Worst Month Since May 2012
NEW YORK (TheStreet) -- U.S. stocks posted the worst month since May 2012 as Amazon (AMZN), Wal-Mart (WMT), MasterCard (MA) and Mattel (MAT) tumbled on disappointing quarterly results, and global equities slumped on renewed concerns that emerging market economies, led by China, are slowing more than expected.
- The S&P 500 dropped 0.65% to 1,782.59, while the Dow Jones Industrial Average fell 0.94% to 15,698.85. The Nasdaq slid 0.47% to 4,103.88. The S&P 500 dropped 3.18% in January, which was the worst tumble since a 6.27% drop in May 2012. The Dow tumbled 4.88% in January, which was its biggest loss since a 6.21% drop in May 2012.
- "I think people are pretty spooked at the moment, and you can't invest across the board," John Rutledge, chief investment strategist of Safanad, said in a phone interview. "There's a system wide anxiety that seems to be showing itself."
- Market sentiment has been rattled as emerging market currencies have come under renewed pressure, including those from Hungary, Turkey, South Africa, Russia and Poland.
- The world's largest internet retailer, Amazon.com, sank 11% after its fourth-quarter earnings and revenue missed Wall Street estimates. Google (GOOG) gained 4% after posting fourth-quarter results that were mixed compared to Wall Street expectations. Toymaker Mattel dropped 12% after its revenue came in short of expectations.
- Other key laggards in the S&P included MasterCard and Newmont Mining (NEM), which shed 5.1% and 10.4%, respectively.
- U.S. consumer spending grew by more than expected in December though income growth was weak. Consumer spending, which accounts for more than two-thirds of economic activity, increased 0.4% in December after rising by 0.6% in November, the Commerce Department said Friday. Income was unchanged after rising 0.2% in November.
- The January Chicago Purchasing Managers Index fell for a third consecutive month, dipping to 59.6 with its employment component falling to 49.2. The prices paid component was its highest since November 2012 at 64.9. The Thomson Reuters/University of Michigan final January index of consumer sentiment slid to 81.2 from 82.5 a month earlier, narrowly beating estimates.
- The FTSE 100 closed off 0.44% and the DAX in Germany retreated 0.72% as shares of European companies tumbled following their earnings releases. Furthermore, data showed a cooling of the eurozone inflation rate to a record low in January and a still high jobless rate for the region in December. In Asia, the Hang Seng finished down 0.48% while the Nikkei shed 0.62%.
Jim Cramer on Amazon: No Reason to Panic, Buyers Will Come Back
Wal-Mart Revises Q4 Guidance, Bleeds Just Like Smaller Retailers
MasterCard's Q4 Revenue Jumps, but Wall Street Wants More
-- Written by Jane Searle and Joe Deaux in New York.
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