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Global stock markets face correction as S&P 500 joins Nasdaq in 10% decline

Two of the three most-followed global share market indices have now stumbled into correction territory after the S&P 500 followed the Nasdaq into a 10% plus decline on Friday.

The Dow fell 366.71 points, or 1.12%, to close at 32,417.59. The S&P 500 lost 0.48% to finish at 4,117.37, closing 10.3% lower from this year’s peak on July 31.

The Nasdaq, however, bounced a little to close up 0.38% at 12,643.01, thanks to shares of Amazon, which rose more than 6% after investors thought long and hard about the quality of its third-quarter update and forecast for the current fourth quarter.

Other mega-cap tech stocks, such as Microsoft – which had a good quarterly update, followed Amazon shares higher. Apple shares added 0.8% on the day but are the final test of market sentiment with the release of its quarterly figures on Thursday.

All three major measures registered weekly losses. The Dow and S&P 500 lost 2.1% and 2.5%, respectively, over the week, while the Nasdaq dropped 2.6%, despite Friday’s little bounce.

Amazon’s Friday rise wiped out the week’s loss and left the shares up 2.5%, while Microsoft shares managed to cling on to nearly 1% for the five days.

Apple shares lost 2.7% for the week, Meta shares fell 3.8%, Tesla slipped 2.2%, and Netflix dipped 0.7%, but Alphabet stood out with a near 10% slump. Nvidia shares edged up on Friday but still lost around 2% for the week.

However, Ford shares lost 14% because the quarterly report and commentary were deemed negative, especially on electric vehicles. Chevron shares fell 6.7% on Friday as investors worried about the quality of the quarterly figures and more than 13% for the week. Investors also reckon Chevron is being unwise in its all-paper $US53 agreed bid for Hess.

Exxon Mobil shares lost ground on Friday on its well ‘guided’ quarterly result, which was a bit better than that ‘guidance’. Exxon shares dropped nearly 2% on the day and close to 5% for the week.

And Australia’s ASX 200, down 8.4% from its last peak on July 27 by Friday’s close, is looking at a 67-point slide this morning.

That will be after Friday’s surprise rise of 0.21% (which trimmed the week’s loss to 1%).

Investors will have seen the emergence of Gina Rinehart’s Hancock Prospecting as the owner of 18.3% of Azure Minerals in what looks like an attempt to frustrate SQM’s $1.6 billion bid for Azure.

Amid all the angst about rates, currencies, and the Middle East fighting, plus oil prices, a big property fund manager merger has been abandoned.

The volatility in commercial property asset values has ended the proposed $1.1 billion unlisted merger between Australian Unity Diversified Property Fund and the Cromwell Direct Property Fund.

The two groups said on Friday the merger has been terminated.

In a statement, Dr. Joe Fernandes, Chief Investment Officer and Executive General Manager, Funds Management, Australian Unity, said that material changes in the prevailing environment for commercial property had increased uncertainty in relation to the proposed merger.

“Given these developments, both parties have determined that proceeding with the proposed merger is no longer in the best interests of the respective funds’ unitholders,” he said.

On Friday, Macquarie Group releases its September 30 half-year results; they will be weak.

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