Stocks tumble, Nasdaq tumbles as Netflix slips after subscribers miss out

Stocks were on track to end a volatile week lower as investors moved further away from growth and technology stocks that had outperformed at the start of the pandemic.

The S&P 500, Dow and Nasdaq fell during intraday trading. A day earlier, the Nasdaq Composite fell more than 1%, adding to losses after sinking into a correction earlier this week. The Nasdaq is down nearly 12% from its most recent high in November as of Thursday’s close.

Shares of Netflix (NFLX) fell more than 20% after the company released a first-quarter subscriber growth outlook well below expectations, with the streaming giant predicting 2.5 million new users for the first quarter of 2022 against the expected 6.3 million, according to Bloomberg data. Shares of Disney (DIS) and Roku (ROKU) fell in sympathy. Meanwhile, Peloton (PTON) – which had been another darling of so-called “from-home” trading during the pandemic – recouped some losses after falling to a nearly two-year low on Thursday, after CNBC reported that the company was cutting production of its fitness products due to lower demand.

“It’s those infamous home games…that have been offered at valuations that are reaching the point where they’re priced to perfection,” Mark Luschini, chief investment strategist at Janney Montgomery Scott, told Yahoo Finance Live. Thursday. “Anything published about the results or investment outlook of companies that fail to meet or exceed very high expectations leads to gigantic disappointment in the form of a falling share price.”

“It points to companies that, again, have valuations that have been boosted by disappointed investors who decide to sell first and ask questions later, and therefore leave enormous carnage in their wake as valuations are compressing to better reflect the outlook under a more normal economic climate,” Luschini added.

The decline in many highly watched and highly regarded tech stocks — and broader stock indices — has also been accompanied by investor jitters about a potential near-term move in Federal Reserve interest rates. The Fed’s next policy-setting meeting is set to take place next week, with market participants widely pricing in an initial central bank interest rate hike after the Fed’s March meeting. These expectations of higher rates and less liquidity from the Fed this year have also been a key driver of recent stock price movements, many strategists noted.

“I think there’s an ongoing rotation into areas of the market that have been neglected for a long time – not just months, but years. Areas like finance and energy. Even healthcare, which are an area that had done a bit better during the pandemic, but really isn’t seeing any type of multiples like in the past,” Jeffrey Kleintop, Charles Schwab’s chief global investment strategist, told Yahoo Finance Live on Thursday.

“I think these sectors of the market have more sustainability here as we look at an environment where earnings growth is slowing, so valuations matter more,” he added. “And many of these companies may be looking to generate earnings growth in this environment of rising interest rates and rising commodity prices, as technology is challenged a bit more as demand for goods begins. to slow down.”

10:40 a.m. ET: Leading economic index posts solid jump in December: Conference Board

An index that tracks future domestic economic conditions accelerated in December, pointing to still strong growth trends in the United States, even amid lingering concerns over the pandemic, inflation and a more hawkish slant in monetary policy. .

The Conference Board’s closely watched Leading Economic Index (LEI) rose 0.8% in December, matching consensus estimates, according to Bloomberg data. This picked up from November’s 0.7% clip, which was revised down from the previously reported 1.1% gain.

“The US LEI ended 2021 on an upward trajectory, suggesting the economy will continue to expand through spring,” Ataman Ozyildirim, senior director of economic research at The Conference Board, said in a press release.

“For the first quarter, headwinds from the Omicron Variant, labor shortages and inflationary pressures — as well as planned interest rate hikes from the Federal Reserve — could dampen economic growth,” he said. added Ozyildirim. “The Conference Board forecasts GDP growth for the first quarter of 2022 to slow at a relatively healthy rate of 2.2% (annualized). Yet, for the whole of 2022, we expect the US economy to grow by 3, 5%, well above the pre-pandemic growth trend.

9:31 a.m. ET: Stocks open lower

Here is where the markets were trading Friday morning:

  • S&P 500 (^GSPC): -12.92 (-0.29%) to 4,470.23

  • Dow (^ DJI): -69.52 (-0.2%) to 34,645.87

  • Nasdaq (^IXIC): -57.82 (-0.41%) to 14,095.93

  • Raw (CL=F): -0.60$ (-0.7%) at 84.95$ per barrel

  • Gold (CG=F): +$0.10 (+0.01%) to $1,842.70 per ounce

  • 10-year cash flow (^TNX): -7.8 bps for a yield of 1.756%

9:27 a.m. ET: Bitcoin extends declines, falling to around $38,000

Cryptocurrency prices have tracked the volatility of risky assets this week.

Bitcoin, the largest cryptocurrency by market cap, saw its prices drop 10% to below $38,000 at Friday’s low, according to data from Yahoo Finance. This is the lowest level since early August.

Other major cryptocurrency prices also fell. Ethereum fell more than 12% to around $2,800 on Friday morning in New York. Solana prices fell 15% to below $120.

7:31 a.m. ET Friday: Stock futures remain lower, Netflix weighs on the Nasdaq

Here is where the markets were trading Friday morning:

  • S&P 500 Futures Contracts (ES=F): -19.75 points (-0.44%), to 4,455.00

  • Dow futures contracts (JM=F): -68 points (-0.2%), to 34,548.00

  • Nasdaq futures contracts (NQ=F): -115.5 points (-0.78%) to 14,725.50

  • Raw (CL=F): -$1.38 (-1.61%) at $84.17 per barrel

  • Gold (CG=F): -$8.60 (-0.47%) at $1,834.00 per ounce

  • 10-year cash flow (^TNX): -5.3 bps for a yield of 1.781%

6:01 p.m. ET Thursday: Stock futures open lower

Here’s where the markets were trading on Thursday night:

  • S&P 500 Futures Contracts (ES=F): -17 points (-0.38%), to 4,457.75

  • Dow futures contracts (JM=F):—41 points (-0.12%), to 34,575.00

  • Nasdaq futures contracts (NQ=F): -128.25 points (-0.86%) to 14,712.75

NEW YORK, NEW YORK – JANUARY 20: Traders work on the floor of the New York Stock Exchange (NYSE) on January 20, 2022 in New York City. The Dow Jones Industrial Average rose more than 200 points in morning trade after days of declines. (Photo by Spencer Platt/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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