US stocks plunged on Friday as grim earnings reports from Amazon and Alphabet rekindled a rush to dump technology and high-growth stocks, but data showing economic growth in the last quarter slowed less than expected provided some relief.

The Nasdaq dropped nearly 2%, sharply cutting its gains for the year and moving deeper into correction territory, while the blue-chip Dow shed 1.1% and the benchmark S&P fell 1.56%, putting under threat their slim gains for the year. Inc tumbled 7.1% after it not just missed quarterly sales estimates, but also gave a below par holiday-season sales forecast.

Google-parent Alphabet Inc sank 3.3% after its revenue missed estimates, fanning concerns that investments in new businesses, rising regulatory scrutiny and competition are producing slow returns.

That triggered a sell-off in other members of the so-called FAANG group. Both Facebook Inc and Netflix Inc dropped 2.3% and Apple Inc slid 1.5%.

All of the 11 major S&P sectors were in the red, with the communication services taking the steepest hit with a 2.06% fall and technology stocks down 1.48%.

“When the stocks that are carrying the markets begin to crack, investors are going take cover. Investors are waiting for more visibility for things to see where the rotation takes them," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

On the brighter side was data that showed gross domestic product increased at a 3.5% annualized rate in the third quarter as a tariff-related drop in soybean exports was partly offset by the strongest consumer spending in nearly four years and a surge in inventory investment.

“This is seen as a slight positive. There’s less pressure on the Federal Reserve to do something (on interest rates)," Bakhos said.

While US economic growth kept apace despite trade wars, the same cannot be said of US corporate profit growth, as a slew of disappointing forecasts this earnings season showed how tariffs, rising wages and borrowing costs as well as jitters over geopolitical events are hurting companies.

At 9:56 a.m. EDT the Dow Jones Industrial Average was down 274.85 points, or 1.10%, at 24,709.70, the S&P 500 was down 42.12 points, or 1.56%, at 2,663.45 and the Nasdaq Composite was down 144.96 points, or 1.98%, at 7,173.38.

A clutch of weak outlook on Wednesday pushed the Nasdaq into correction territory and erased the Dow and the S&P 500’s gains for the year. On Thursday, Microsoft Corp’s strong earnings led a rally that pulled the S&P and Dow back into the black for 2018.

Microsoft, whose strong results helped push the Nasdaq to its biggest daily gain since March just a day earlier, fell 1.2%.

Intel Corp defied weakness to gain 3.6% after its better-than-expected quarterly results, though interim Chief Executive Officer Bob Swan said trade tensions with China could be a “headwind" next year.

Declining issues outnumbered advancers for a 5.14-to-1 ratio on the NYSE and a 3.38-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week highs and 51 new lows, while the Nasdaq recorded three new highs and 173 new lows.

My Reads Logout