By Geoffrey Smith
Investing.com -- U.S. stock markets opened mostly lower on Friday, as disappointing results from three market heavyweights cast doubt on the ability of companies to keep on top of rising costs and supply chain problems.
By 9:40 AM ET (1340 GMT), The Dow Jones Industrial Average was up 20 points or 0.1%, while the S&P 500 was down 0.3% and the NASDAQ composite was down 86 points or 0.6%.
In early dealings, Amazon (NASDAQ:AMZN) stock fell 4.5% and Apple (NASDAQ:AAPL) stock felt 3.7%, as investors took money off the table in response to figures that fell short of expectations on Thursday evening.
Apple had warned that the supply chain issues which led to a shortfall in sales in the third quarter were, if anything, likely to get worse in the current quarter, its most important of the year.
Amazon, for its part, was struggling after warning that higher costs, especially for freight and labor, would all but consume its operating profit in the coming quarter.
Starbucks (NASDAQ:SBUX) stock also fell 7% after warning that it expects a sharp slowdown in same-store sales in its new financial year.
The lack of suitable workers at a time of intense demand is prompting firms to pay up for staff," analysts at ING said in a note. "With labor costs surging the most in years, this will only increase inflation stresses in the economy and heap more pressure on the Fed to accelerate the process of “normalising” monetary policy."
Figures released earlier by the Commerce Department showed that U.S. personal spending continued to grow in September, though by only 0.6% after a 1.0% rise in August, reflecting what appears likely to be a temporary hit from the Delta variant COVID-19 virus.
Other data showed that inflationary pressures continue to build, with the core personal consumer expenditures basket rising 0.2% on the months, a slight slowdown from 0.3% in August.
Household finances remain in great shape and with household wealth having increased by $26 trillion since 4Q 2019, there is no reason to believe that spending is about to hit the buffers with consumers able to weather a winter storm of higher energy costs," ING said.
Figures released earlier by the commerce department has shown that U.S. personal spending grew more slowly in September, by only 0.6% after a 1.0% rise in August, reflecting what appears likely to be a temporary hit from the Delta variant COVID-19 virus.
Elsewhere, Zendesk (NYSE:ZEN) stock tumbled 19%, in response to analyst downgrades after it announced the $4.1 billion acquisition of Momentive, the parent of SurveyMonkey.
Going in the other direction was Lucid Group (NASDAQ:LCID) stock, which extended Thursday’s gains by another 3.9%. The company had said on Thursday that customer deliveries of its electric vehicles will start this week.
Chevron (NYSE:CVX) stock and Exxon Mobil (NYSE:XOM) stock rose 1.0% and 0.9% after both oil majors reported solid increases in profit, thanks to the rebound in crude prices.