Wall Street closes sharply lower, S&P 500 loses more than 4% for the week

• All 11 major sectors end the week in the negative territory.
• Disappointing earnings reports weigh on technology.
• Today’s GDP report fails to ease concerns over economic performance.

Major equity indexes in the U.S. started the day on the back foot and extended their slide before staging an unimpressive recovery in the second half of the session. All 11 major sectors of the S&P 500 finished the day in the negative territory with losses ranging from 0.65% to 3.55%.

With both Google and Amazon missing analysts’ estimates in their Q3 earnings reports, both the S&P 500 Technology and Communication Services came under pressure on Friday to end the day 1.9% and 2.4%, respectively.

Meanwhile, today’s data from the U.S. showed that the real GDP expanded by 3.5% in the third quarter according to the first estimate of the U.S. Bureau of Economic Analysis. Although this reading came in above the analysts’ estimate of 3.3%, the details of the publication showed that tariffs started to weigh on the economic growth with exports falling  and rising imports rising strongly.

Commenting on today’s market action,  “It’s a classic correction. When markets have gone up as much as they have, people start selling what they own and they are selling it primarily because it’s going down and not because the fundamentals have deteriorated that much. I think the two potential catalysts for a sharp recovery are the mid-term elections getting behind us and any positive developments between China and the United States,”  Tom Plumb, chief investment officer of the Plumb Funds and manager of the Plumb Balanced Fund in Madison, Wisconsin, told Reuters.

The Dow Jones Industrial Average lost 296.24 points, or 1.19%, to 24,688.31, the S&P 500  erased 47 points, or 1.74%, to 2,658.57 and the Nasdaq Composite fell 151.12 points, or 2.07%, to 7,167.21.  For the week, these three major indexes dropped 2.97%, 4.03% and 3.78%, respectively.