A rash of selling on Friday wiped out July gains for both the Dow Jones industrial average and the Nasdaq composite index as investors reacted to earnings-driven developments and resurfaced European concerns.
The Dow fell 120.79 points, or 0.9 percent, to close at 12,822.57, with 27 of the index’s 30 components lower. The index is down nearly 0.5 percent for July, but still finished up 0.4 percent for the week.
The Nasdaq shed 40.6 points, or 1.4 percent, to close at its intraday low of 2,925.30. The index is down 0.3 percent for July, but up 0.6 percent for the week.
The S&P 500 index lost 13.85 points, or 1 percent, to finish at 1,362.66, just shy of its low on the day of 1,362.19. The index is up less than 0.1 percent for July, and up 0.4 percent for the week.
Following headlines that have focused on U.S. earnings all week, a rise in Spanish bond yields showed that investors remain wary of Spain’s ability to control its debt problems.
From an investor standpoint, fear and concern over ongoing financial pressure in Europe are still playing strong, said Frank Fantozzi, president and senior adviser at Planned Financial Services in Cleveland.
While eurozone ministers approved a bailout plan for Spanish banks on Friday, Spain’s Valencia regional government stepped up and said it would apply for help from the new government fund in an effort to meet its refinancing needs.
U.S. earnings news, however, still held sway over many individual movers. “A lot of the best- and worst-performing names are all earnings-driven,” said Dan Greenhaus, chief global strategist at BTIG LLC. Greenhaus pointed to SanDisk Corp. and Chipotle Mexican Grill Inc.
SanDisk shares led the S&P 500 higher, rising 10 percent after the company turned in better-than-expected results late Thursday.
Denver-based Chipotle shares dropped more than 21 percent after quarterly results showed the chain’s slowest sales growth since early 2010.
Investor reaction to Chipotle is interesting because it’s showing what happens when a high-growth, high price-to-earnings ratio stock slows down in today’s market environment, according to Greenhaus. He also said that revenue misses appear to be a key theme in this earnings season.
