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Nasdaq tumbles to lowest close since late 2020

Economy Apr 26, 2022 08:01PM ET
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© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 30, 2022. REUTERS/Brendan McDermid/File Photo

By Noel Randewich and Bansari Mayur Kamdar

(Reuters) - Wall Street ended sharply lower on Tuesday, with the Nasdaq closing at its lowest since December 2020 as investors worried about slowing global growth and a more aggressive Federal Reserve.

Tesla (NASDAQ:TSLA) slumped 12% after investors worried that chief executive Elon Musk might sell some of his stake in the electric car maker to help pay for his $44 billion deal to buy Twitter (NYSE:TWTR), announced on Monday.

Tesla contributed more than any other stock to the S&P 500 and Nasdaq's steep declines.

It was the steepest one-day drop for the Nasdaq since September 2020. The tech-heavy index has now fallen 22% from its record high close last November.

Previously-prized growth stocks have been hammered in recent weeks as investors fret about the impact of higher interest rates on their future earnings.

China's COVID-19 led lockdown and an aggressive pivot by major central banks to fight inflation have overshadowed what has been a better-than-expected quarterly earnings season so far.

Alphabet (NASDAQ:GOOGL) Inc and Microsoft Corp (NASDAQ:MSFT) both dropped almost 4% ahead of their results after the closing bell. About a third of the S&P 500 companies are set to report results this week.

Alphabet fell another 6.5% in extended trade after its quarterly report disappointed investors.

Apple (NASDAQ:AAPL), Wall Street's most valuable company, fell 3.7% in Tuesday's session ahead of its report on Thursday.

"Earnings broadly have been pretty good. But it hasn't really mattered very much to the overall stock story. It's mainly about the Fed and other central banks, and now China and COVID," said Ross Mayfield, an investment strategist at Baird in Louisville, Kentucky.

"I think with where the market is right now, in this indiscriminate selling and fear phase, I think you've got more potential for downside risk than you have for an upside surprise," Mayfield said.

The S&P 500 consumer discretionary index lost 4.99% and was among the worst of 11 sector indexes, pulled lower by Tesla, and also by a 4.6% decline in Amazon (NASDAQ:AMZN).

The S&P 500 energy index was the only sector to rise, ending up 0.05% as oil prices rebounded following reports that Russian gas supplies to Poland would be halted Wednesday, a development viewed as an escalation of tensions between Russia and the West over Ukraine.

The Dow Jones Industrial Average fell 2.38% to end at 33,240.18 points, while the S&P 500 lost 2.81% to 4,175.2.

The Nasdaq Composite dropped 3.95% to 12,490.74.

Of the 134 companies in the S&P 500 that reported earnings so far, 80.6% topped analysts' profit expectations, according to Refinitiv data. In a typical quarter, 66% beat estimates.

General Electric (NYSE:GE) Co tumbled more than 10% after forecasting full-year earnings at the low end of its previous estimate.

United Parcel Service Inc (NYSE:UPS) fell 3.5% despite reporting a rise in quarterly adjusted profit, while U.S. hospital operator Universal Health Services Inc (NYSE:UHS) slumped nearly 9% after its earnings missed estimates.

Meanwhile, data showed U.S. consumer confidence edged lower in April, though households planned to buy automobiles and many appliances, which should help underpin consumer spending in the second quarter.

Volume on U.S. exchanges was 12.3 billion shares, compared with a 12.6 billion average over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 4.71-to-1 ratio; on Nasdaq, a 4.82-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 45 new lows; the Nasdaq Composite recorded 24 new highs and 646 new lows.

(This story corrects fourth paragraph to show it was the Nasdaq's biggest one-day drop since September 2020, not September 2008)

Nasdaq tumbles to lowest close since late 2020
 

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Comments (16)
John Laurens
John Laurens Apr 27, 2022 2:57AM ET
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Gotta love that Biden economy.
Tre Hsi
Tre Hsi Apr 27, 2022 2:57AM ET
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well, I do admit  it doesn't compare to the Trump economy with its -33% GDP growth or 12% unemployment
Marigold Marquee
Marigold Marquee Apr 26, 2022 8:24PM ET
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12856 buying trand
Will Turnage
Bucked_up Apr 26, 2022 8:23PM ET
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Lets geaux brandon
Will Turnage
Bucked_up Apr 26, 2022 8:23PM ET
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Lets go Brandon!!!
Gerard Rotonda
Gerard Rotonda Apr 26, 2022 2:59PM ET
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Gerard Rotonda, "When... the most reliable buyer with its own printing press and an incredible willingness to buy – when they step out of the market, that is a fundamental change to the marketplace.  Since stocks roared back from the lows of March 23, we saw many record highs. It’s important to recognize that the narrative justifying those record highs has changed."  Gerard Rotonda
SLM McKinney
SLM McKinney Apr 26, 2022 2:24PM ET
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Take it easy everyone, just take it easy. This is what the market is all about. Up’s & Down’s. I am taking big losses also. I make believe I am riding a wild horse out in the grasslands.  It makes me feel a little bit better.
daxxx dude
daxxx dude Apr 26, 2022 2:24PM ET
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Read about risk management. Hodl is not an investment strategy.
Casador Del Oso
Casador Del Oso Apr 26, 2022 1:45PM ET
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9900-10000 is now a real possibility.
Wilks Campbell
Wilks Campbell Apr 26, 2022 1:17PM ET
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The media said the Monday rise is due to investor confidence in big tech earnings, now everyone woke up it was lying and misleading because the media say today sell off is also due to big tech earning. Which one is a lie. So, the media must be lying and misleading no matter which one is a lie.
Antonio Velardo
Antonio Velardo Apr 26, 2022 1:17PM ET
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Good question.
Martijn WN
Speculeerbeer Apr 26, 2022 1:17PM ET
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It's not necessarily lying. It's often just guess-work why the market does it what it does. If you need to write an article about this weird market, it's obvious that most of what you write will be nonsense.
Jack Sharma
Jack_2017 Apr 26, 2022 1:17PM ET
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media is clueless so they only change two words in whole article, rise and fall, rest everything remains the same.
Tre Hsi
Tre Hsi Apr 26, 2022 1:17PM ET
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Star Prisnor  "they are reporter not trader or investors,they don't know ****about the market"  -- you are assuming investors/traders know about the market....
Wilks Campbell
Wilks Campbell Apr 26, 2022 1:16PM ET
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The media said the Monday rise is die to investor confidence in big tech earnings, now everyone woke up it was lying and misleading because the media say today sell off is also due to big tech earning. Which one is a lie. So, the media must be lying and misleading no matter which one is a lie.
Mitchel Pioneer
Mitchel Pioneer Apr 26, 2022 1:09PM ET
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The Wall Street criminals have flagrantly drawn the line at 33.5K.  A 5 year old could see it.  Nothing like setting up the breakers to mitigate the loss.  A miracle "in late trade" anyone?  This "market" is a JOKE.
 
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