Wall Street’s main indices ended sharply lower on Friday as Netflix Inc shares plunged after a weak earnings report, capping a brutal week for stocks that saw the S&P 500 and NASDAQ log their biggest weekly percentage drops since the onset of the COVID-19 pandemic in March 2020.
The benchmark S&P 500 posted its third straight week of declines, ending 8.3 percent down from its record high early this month.
Losses also deepened for the NASDAQ Composite after the tech-heavy index earlier in the week confirmed it was in a correction, closing down more than 10 percent from its peak in November last year.
The NASDAQ has fallen 14.3 percent from its November peak and on Friday closed at its lowest level since June last year.
Netflix shares tumbled 21.8 percent, weighing on the S&P 500 and the NASDAQ, after the streaming giant forecast weak subscriber growth. Shares of competitor Walt Disney Co fell 6.9 percent, dragging on the Dow Jones Industrial Average, while Roku Inc also slid 9.1 percent.
“It has really been a continuation of a tech rout,” Kingsview Investment Management portfolio manager Paul Nolte said. “It’s really a combination of a rotation out of technology as well as very poor numbers from Netflix that I think is the catalyst for today.”
The Dow Jones Industrial Average on Friday fell 450.02 points, or 1.3 percent, to 34,265.37, the S&P 500 lost 84.79 points, or 1.89 percent, to 4,397.94 and the NASDAQ Composite dropped 385.10 points, or 2.72 percent, to 13,768.92.
For the week, the S&P 500 fell 5.7 percent, the Dow dropped 4.6 percent and the NASDAQ declined 7.6 percent.
The Dow fell for a sixth straight session, its longest streak of daily declines since February 2020.
The S&P 500 closed below its 200-day moving average, a key technical level, for the first time since June 2020.
“When markets get like they’ve gotten this week, the emotion is what takes over,” Leuthold Group chief investment strategist Jim Paulsen said. “Until it finds support, no one’s going care about anything fundamental.”
Stocks are off to a rough start this year, as a fast rise in US Treasury yields amid concerns that the US Federal Reserve will become aggressive in controlling inflation has particularly hit technology and growth shares.
Investors are keenly focused on next week’s Fed meeting for more clarity on the central bank’s plans to tighten monetary policy in the coming months, after data last week showed that US consumer prices last month had the largest annual rise in nearly four decades.
“Between the Fed meeting and earnings, there is a lot that the market could be worried about next week,” Commonwealth Financial Network global investment strategist Anu Gaggar said.
Apple Inc, Tesla Inc and Microsoft Corp are among the large companies due to report next week in a busy week of earnings results.
Declining issues outnumbered advancing ones on the New York Stock Exchange by a 4.26-to-1 ratio; on NASDAQ, a 4.34-to-1 ratio favored decliners.
The S&P 500 posted five new 52-week highs and 24 new lows; the NASDAQ Composite recorded 13 new highs and 1,029 new lows.
About 14.6 billion shares changed hands in US exchanges, compared with the 10.4 billion daily average over the past 20 sessions.
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