On Thursday, Amazon, the online retail giant, announced that, contrary to analysts’ predictions and after months of financial losses, it had turned a profit in the second quarter.
The stock market responded with euphoria. Amazon’s share price surged by 18 percent in a single day, adding $40 billion to the company’s market capitalization. With 154,000 employees, Amazon overnight became the world’s largest retailer by market capitalization, surpassing Wal-Mart, with 2.2 million employees.
The market response was conditioned by the fact that stocks have been registering significant losses in the US in the past week, with earnings reports of major companies falling short of expectations amidst growing signs of slump in the United States and internationally.
These include a continuing sharp fall in the prices of commodities such as oil and iron ore, along with declining growth rates in China and a number of emerging markets, and ongoing stagnation in Europe. The International Monetary Fund earlier this month predicted the worst year for global growth since 2009, and last week the US Federal Reserve Board, in its semiannual Monetary Policy Report, painted a grim picture of the state of the US economy.