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Major U.S. benchmark indexes edged lower on Friday, making it a brutal with for stocks that saw S&P 500 and Nasdaq recording their worst weekly percentage declines since the onset of the pandemic in 2020. All the three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) shed 1.3% or 450.02 points to end at 34,265.37 points. The blue-chip index has now declined for six consecutive sessions, recording its longest streak of declines since February 2020.
The S&P 500 lost 1.9% or 84.79 points to finish at 4,397.94 points. Communication services, materials, financials and technology stocks were the worst performers.
The Communication Services Select Sector SPDR (XLC) lost 3.4%, while the Materials Select Sector SPDR (XLB) and Financials Select Sector SPDR (XLF) shed 2.4% and 2.1%, respectively. The Technology Select Sector SPDR (XLK) declined 2%. All the 11 sectors of the benchmark index ended in negative territory.
The fear-gauge CBOE Volatility Index (VIX) was up12.74% to 28.85. A total of 14.6 billion shares were traded on Friday, higher than the last 20-session average of 10.4 billion. Decliners outnumbered advancers on the NYSE by a 4.26-to-1 ratio. On Nasdaq, a 4.34-to-1 ratio favored declining issues.
Tech Stocks Continue to Suffer
Tech stocks which have been responsible for the rally for most part of last year have been suffering form the beginning of 2022. The bloodbath continued almost throughout the week, with Friday being no different as tech stocks continued to take a hit.
Rising interest rates have been worrying investors for quite some time, which is directly affecting the high-growth tech stocks. Also, the 10-year Treasury yield has been on the rise since the beginning of the year as concerns continue to grow that the Fed will take more aggressive steps than expected to control inflations.
Rising bond yield have been directly taking a toll on the high-growth tech stocks. On Friday the 10-year Treasury yield fell to 1.762% but it has been rising all throughout January 1.5% in December.
This saw the Nasdaq officially entering into correction territory on Wednesday. The index is now almost down 15% from its recent November high. On Friday, it further took a hit to close at its lowest level since June.
Tech Earnings Disappoint
To make things worse the tech giant Netflix, Inc. (NFLX - Free Report) reported disappointing quarterly results. Although Netflix reported fourth-quarter 2021 earnings of $1.33 per share, beating the Zacks Consensus Estimate of $0.82 per share, the streaming giant said its subscriber growth slowed down in the quarter.
The company managed to add 8.28 million paid subscribers globally against the addition of 8.51 million in the year-ago quarter, missing its guidance of 8.5 million paid-subscriber additions. This sent the company’s shares tumbling by 21.8%. As a ripple effect, shares of its rivals The Walt Disney Company (DIS - Free Report) also fell 6.9%.
Economic Data
Not much economic data was released on Friday except for the Conference Board’s leading economic index for December, which increased 0.8%.
Weekly Roundup
It has been a turbulent week for all the three major index with the Nasdaq putting up the worst show. The Nasdaq declined 7.6% for the week to record its worst weekly percentage drop since March 2020.
The S&P 500 lost 5.7% for the week, recording its third straight week of losses, and also its steepest decline since March 2020.
The Dow fell 4.6% for the week, recording its worst close since October 2020.
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Stock Market News for Jan 24, 2022
Major U.S. benchmark indexes edged lower on Friday, making it a brutal with for stocks that saw S&P 500 and Nasdaq recording their worst weekly percentage declines since the onset of the pandemic in 2020. All the three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) shed 1.3% or 450.02 points to end at 34,265.37 points. The blue-chip index has now declined for six consecutive sessions, recording its longest streak of declines since February 2020.
The S&P 500 lost 1.9% or 84.79 points to finish at 4,397.94 points. Communication services, materials, financials and technology stocks were the worst performers.
The Communication Services Select Sector SPDR (XLC) lost 3.4%, while the Materials Select Sector SPDR (XLB) and Financials Select Sector SPDR (XLF) shed 2.4% and 2.1%, respectively. The Technology Select Sector SPDR (XLK) declined 2%. All the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq fell 2.72% or 385.10 points, closing below the psychological level of 14,000 at 13,768.92 points Shares of Amazon.com, Inc. (AMZN - Free Report) declined 6%, while Apple, Inc. (AAPL - Free Report) fell 1.3%. Apple has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The fear-gauge CBOE Volatility Index (VIX) was up12.74% to 28.85. A total of 14.6 billion shares were traded on Friday, higher than the last 20-session average of 10.4 billion. Decliners outnumbered advancers on the NYSE by a 4.26-to-1 ratio. On Nasdaq, a 4.34-to-1 ratio favored declining issues.
Tech Stocks Continue to Suffer
Tech stocks which have been responsible for the rally for most part of last year have been suffering form the beginning of 2022. The bloodbath continued almost throughout the week, with Friday being no different as tech stocks continued to take a hit.
Rising interest rates have been worrying investors for quite some time, which is directly affecting the high-growth tech stocks. Also, the 10-year Treasury yield has been on the rise since the beginning of the year as concerns continue to grow that the Fed will take more aggressive steps than expected to control inflations.
Rising bond yield have been directly taking a toll on the high-growth tech stocks. On Friday the 10-year Treasury yield fell to 1.762% but it has been rising all throughout January 1.5% in December.
This saw the Nasdaq officially entering into correction territory on Wednesday. The index is now almost down 15% from its recent November high. On Friday, it further took a hit to close at its lowest level since June.
Tech Earnings Disappoint
To make things worse the tech giant Netflix, Inc. (NFLX - Free Report) reported disappointing quarterly results. Although Netflix reported fourth-quarter 2021 earnings of $1.33 per share, beating the Zacks Consensus Estimate of $0.82 per share, the streaming giant said its subscriber growth slowed down in the quarter.
The company managed to add 8.28 million paid subscribers globally against the addition of 8.51 million in the year-ago quarter, missing its guidance of 8.5 million paid-subscriber additions. This sent the company’s shares tumbling by 21.8%. As a ripple effect, shares of its rivals The Walt Disney Company (DIS - Free Report) also fell 6.9%.
Economic Data
Not much economic data was released on Friday except for the Conference Board’s leading economic index for December, which increased 0.8%.
Weekly Roundup
It has been a turbulent week for all the three major index with the Nasdaq putting up the worst show. The Nasdaq declined 7.6% for the week to record its worst weekly percentage drop since March 2020.
The S&P 500 lost 5.7% for the week, recording its third straight week of losses, and also its steepest decline since March 2020.
The Dow fell 4.6% for the week, recording its worst close since October 2020.