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S&P 500 has longest weekly drop since 2012 as Fed cuts stimulus

Stocks fell for a third week, the longest slump since 2012 for the Standard & Poor’s 500 index, after the Federal Reserve cut stimulus even as a rout in emerging markets spurred concern about the global economy.

Apple Inc. (Nasdaq: AAPL) slumped 8.3 percent to $500.60. The company’s iPhone sales for the holiday season missed analysts’ estimates, adding pressure for CEO Tim Cook to release new hit products to revive growth

Amazon.com Inc. (Nasdaq: AMZN) tumbled 7.5 percent as its earnings report showed revenue growth slowed outside the U.S. and holiday shipping costs surged.

Boeing Co. (NYSE: BA) dropped 8.3 percent after its profit forecast trailed predictions amid a slowing pace of jet orders.

Caterpillar Inc. (NYSE: CAT) jumped 9 percent after announcing a stock buyback and forecasting better-than-expected earnings amid demand for construction equipment.

The S&P 500 slipped 0.4 percent to 1,782.59 in the week and reached the lowest level since November on Jan. 29. The Dow Jones industrial average lost 180.26 points, or 1.1 percent, to 15,698.85. Both gauges capped the worst month in almost two years, with the S&P 500 finishing January down 3.6 percent and the Dow dropping 5.3 percent.

Equities fell as currencies from Turkey to Argentina tumbled, spurring concern that the turmoil in emerging markets may threaten a global economic recovery. While surprise rate increases by central banks in Turkey and South Africa failed to boost their currencies, the U.S. Fed opted to press on with reductions to its monetary stimulus.

Fed policymakers said Wednesday that the central bank will trim its monthly bond purchases by $10 billion to $65 billion, cutting the pace of stimulus for a second straight meeting because of an improving economy.

U.S. gross domestic product expanded 3.2 percent in the fourth quarter, matching economists’ estimates, according to Commerce Department figures. Other reports over the week showed that consumer spending climbed more than forecast even as incomes stagnated while orders for durable goods unexpectedly slumped in December by the most in five months.

Walt Disney Co. (NYSE: DIS) and Merck & Co. (NYSE: MRK) are among 92 companies in the S&P 500 scheduled to announce financial results this week.

Amazon sank 7.5 percent to $358.69 in the week, its worst drop since 2011. Net income was 51 cents a share in the fourth quarter, missing the average analyst estimate of 69 cents as the company’s global growth weakened. Amazon’s international sales growth slowed to 13 percent in the quarter from 21 percent a year earlier.

Yahoo! Inc. (Nasdaq: YHOO) fell 5 percent to $36.01. The company forecast first-quarter sales that fell short of some analysts’ estimates as CEO Marissa Mayer struggles to turn user growth at the Web portal into advertising dollars.

ADT Corp. (NYSE: ADT), the provider of security services for residences and small businesses, plunged 23 percent to $30.04 for the biggest loss in the S&P 500 after profit and sales trailed analysts’ estimates.

Caterpillar advanced 9 percent to $93.91. The largest maker of mining and construction equipment said profit will be $5.85 a share this year excluding $400 million to $500 million in restructuring costs. That’s more than the $5.77 average estimate. Caterpillar approved a $10 billion share buyback plan through 2018.

Facebook Inc. (Nasdaq: FB) jumped 15 percent to a record $62.57. The world’s largest social network said more than half its advertising revenue came from mobile devices in the fourth quarter, helping sales rise 63 percent to $2.59 billion.

Alexion Pharmaceuticals Inc. (Nasdaq: ALXN) surged 19 percent to $158.73, the biggest gain in the S&P 500 and the most for the stock since 2008. The maker of the rare-disease drug Soliris reported fourth-quarter earnings that exceeded analysts’ estimates, helped by a lower-than-projected tax rate.

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