Stocks sink further in late trading; Amazon drops

KEN SWEET AP Markets Writer Published:

NEW YORK (AP) -- Stocks were sharply lower in afternoon trading Friday, dragged down by disappointing results from retail giant Amazon and Ford. Escalating tensions between the U.S. and Russia over Ukraine also weighed on the market. In addition to Amazon, other major tech names including Facebook also fell sharply.

KEEPING SCORE: The Standard & Poor's 500 index fell 15 points, or 0.8 percent, to 1,864 as of 1:25 p.m. Eastern. The Dow Jones industrial average fell 159 points, or 1 percent, to 16,343 and the Nasdaq composite fell 76 points, or 1.8 percent, to 4,072. All three indexes are now lower for the week.

FORD STALLS: Ford fell 56 cents, or 3.2 percent, to $15.80 after the company reported earnings that fell short of Wall Street's expectations. Worldwide sales rose 6 percent in the first quarter, but the company reported a sales drop in North America that cut into the company's profit. General Motors fell 23 cents, or 1 percent, to $33.94.

AMAZON PRICE CUT: Amazon, the world's largest online store, sank $32.40, or 10 percent, to $304.61. Amazon reported late Thursday an increase in first-quarter profit, but the company also said that spending on investments will likely lead to an operating loss in the second quarter. Other tech names also lost ground including Facebook, which gave up $2.74, or 4.5 percent, to $58.06.

VOLATILITY: Investors have had little patience for companies missing their forecasts this quarter, said Scott Clemons, chief investment strategist at Brown Brothers Harriman.

"The market is in a precarious position at the moment, and overreacts to bad news far more than it did last year," he said, noting as an example the 10 percent drop in Amazon's stock price, even though the company meet analysts' forecasts. "This volatility doesn't have to be the enemy, because it allows you to pick up companies on the cheap."

RUSSIA: Secretary of State John Kerry accused Russia on Thursday of failing to live up to commitments it made to ease the crisis in Ukraine. In blunt language, Kerry said that unless Moscow takes immediate steps to de-escalate the situation, Washington will have no choice but to impose additional sanctions.

SANCTIONS FALLOUT: The sanctions already in place are starting to impact the profits of some U.S. companies, notably the payment processors Visa and MasterCard. Visa fell $9.42, or 5 percent, to $199.99 after it warned that the U.S. sanctions against Russia were causing Russian banks to use other companies to process payments. Russian President Vladimir Putin said the country will create its own payment processing system. MasterCard was also hurt by the news. Its stock fell $3.51, or 5 percent, to $70.84.

OTHER MARKETS: Prices for U.S. government bonds rose, pushing the yield on the 10-year note down to 2.66 percent from 2.68 percent late Thursday. Yields fall when bond prices rise. The price of oil slipped $1.34, or 1.3 percent, to $100.60 a barrel. Gold rose $10, or 0.8 percent, to $1,300.60 an ounce.