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Stocks End Down as Delta Variant, Amazon Drop, Weigh on Outlook

Stocks end lower Friday amid concerns about the spread of the COVID-19 Delta variant and Amazon's disappointing quarter.

Stocks finished lower Friday as investors weighed concerns about the spread of the COVID-19 Delta variant and some disappointing results from online retail giant Amazon  (AMZN) - Get Amazon.com, Inc. Report.

The Dow Jones Industrial Average fell 149 points, or 0.42%, to 34,935, the S&P 500 fell 0.54%, while the Nasdaq was off 0.71%.

The yield on the benchmark 10-year Treasury was down 0.04% Friday to 1.232%.

The Nasdaq and Dow added 1.2% and 1.3% respectively in July, while the broad S&P 500 gained 2.3%. The S&P has risen for six consecutive months.

Stocks finished higher Thursday as Wall Street, with both the Dow and S&P 500 posting intraday highs.

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Amazon  (AMZN) - Get Amazon.com, Inc. Report shares tumbled after the online retail giant posted stronger-than-expected second-quarter earnings, but the company's revenue numbers fell shy of Wall Street forecasts.

"Earnings are still phenomenal," Louis Navellier, chief investment officer at Navellier & Associates, said in his newsletter. "But guidance is obviously very, very important. And the market got up on the wrong side of bed because of Amazon."

Pinterest  (PINS) - Get Pinterest, Inc. Class A Report also sank after the image-sharing social media company reported disappointing gains in active users that overshadowed an otherwise solid second-quarter earnings report.

Navellier said Pinterest had "a huge beat but their average user time was down which set off the alarm bells on Wall Street."

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"It shouldn’t," he added. "During colder months, users will spend more time on Pinterest." 

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The Commerce Department reported Thursday that gross domestic product, a measure of all goods and services produced during the April-to-June period, grew 6.5% on an annualized basis, below the forecast of 8.4%.

Investors took that as a positive sign the economy is recovering from its pandemic-induced slump.

However, an internal document from the U.S. Centers for Disease Control and Prevention has suggested the Delta coronavirus variant surging across the U.S. appears to cause more severe illness and spreads as easily as chickenpox. 

The CDC published data Friday that backed the agency's controversial decision this week to change guidance for fully vaccinated people to wear masks indoors in places where transmission of the virus is sustained or high.

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The CDC said from June 19 to July 23, 2021, COVID-19 cases increased about 300% nationally, followed by increases in hospitalizations and death, driven by the Delta variant.

"Although increasing COVID-19 vaccination coverage remains the most effective means to achieve control of the pandemic," the agency said, "additional layered prevention strategies will be needed in the short-term to minimize preventable morbidity and mortality."

Chevron  (CVX) - Get Chevron Corporation Report fell after posting stronger-than-expected second quarter earnings Friday and pledging to resume share buybacks. Exxon Mobil  (XOM) - Get Exxon Mobil Corporation Report was also down after beating Wall Street's second-quarter earnings expectations.

Shares of Robinhood  (HOOD) - Get Robinhood Report started to climb, ending up nearly 1%, after the popular online trading app finished its first trading day as a public company on Thursday down more than 8%.

The personal consumption expenditures price index excluding food and energy rose 3.5% in June on a year-over-year basis, slightly below expectations of a 3.6% increase.

"The good news is it didn't go up as much in June as forecasted," Navellier said. "This means the Fed has been pretty accurate on their inflation forecast."

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