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S&P 500, Nasdaq post worst weeks since pandemic start as Netflix woes deepen slide

Stock MarketsJan 21, 2022 07:23PM ET
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2/2 © Reuters. FILE PHOTO: The Nasdaq logo is displayed at the Nasdaq Market site in Times Square in New York City, U.S., December 3, 2021. REUTERS/Jeenah Moon/File Photo 2/2

By Lewis Krauskopf, Shreyashi Sanyal and Bansari Mayur Kamdar

(Reuters) - Wall Street's main indexes ended sharply lower on Friday as Netflix (NASDAQ:NFLX) 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 pandemic in March 2020.

The benchmark S&P 500 posted its third straight week of declines, ending 8.3% down from its early January record high.

Losses also deepened for the Nasdaq after the tech-heavy index earlier in the week confirmed it was in a correction, closing down over 10% from its November peak. The Nasdaq has now fallen 14.3% from its November peak and on Friday closed at its lowest level since June.

Netflix shares tumbled 21.8%, weighing on the S&P 500 and the Nasdaq, after the streaming giant forecast weak subscriber growth. Shares of competitor Walt Disney (NYSE:DIS) fell 6.9%, dragging on the Dow, while Roku (NASDAQ:ROKU) also slid 9.1%.

"It has really been a continuation of a tech rout,” said Paul Nolte, portfolio manager at Kingsview Investment Management. "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 fell 450.02 points, or 1.3%, to 34,265.37, the S&P 500 lost 84.79 points, or 1.89%, to 4,397.94 and the Nasdaq Composite dropped 385.10 points, or 2.72%, to 13,768.92.

For the week, the S&P 500 fell 5.7%, the Dow dropped 4.6% and the Nasdaq declined 7.6%.

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," said Jim Paulsen, chief investment strategist at The Leuthold Group. "Until it finds support, no one's going care about anything fundamental."

Stocks are off to a rough start in 2022, as a fast rise in Treasury yields amid concerns the Federal Reserve will become aggressive in controlling inflation has particularly hit tech 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 U.S. consumer prices in December 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,” said Anu Gaggar, global investment strategist at Commonwealth Financial Network.

Apple (NASDAQ:AAPL), Tesla (NASDAQ:TSLA) and Microsoft (NASDAQ:MSFT) are among the large companies due to report next week in a busy week of earnings results.

Declining issues outnumbered advancing ones on the NYSE 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 U.S. exchanges, compared with the 10.4 billion daily average over the last 20 sessions.

S&P 500, Nasdaq post worst weeks since pandemic start as Netflix woes deepen slide
 

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Comments (21)
Stefan Krantz
SharpSthlm Jan 22, 2022 6:20AM ET
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People screeming for 10% down when market gone like a rocket last yesrs. Look at the chart in the past, what happens next? Up
Bryant Warner
Bryant Warner Jan 22, 2022 2:00AM ET
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good deal
Peter Cubelo
Peter Cubelo Jan 21, 2022 11:01PM ET
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a great buying opportunity
Chris Hall
Chris Hall Jan 21, 2022 8:15PM ET
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this has everything about the bubble they created out of greed and hate fact that retail make money in their 1% paradise of a ponzi scheme and casino
pcg upstate
pcg upstate Jan 21, 2022 5:59PM ET
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correction
Ss Ee
Ss Ee Jan 21, 2022 5:19PM ET
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Every news or cause being use for down reason. It is not about Netflix or FED. It is simple: They want to correction. That's it. I am waiting greedy WallStreet bankers be convinced current level is enough for stop selling and cross to up trend.
Bradley Jeko
Bradley Jeko Jan 21, 2022 5:06PM ET
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1) Taper 2) Impending rate hikes 3) Inflation. Party’s over. Funds going to start moving into safety as rates increase. Postion yourself wisely, cuz this year is gonna be brutal for equities. All the people who got in the game in 2020, with the Fed printer-party-policy, are about to learn that stonks do, in fact, go down.
Aleksandr Radchenko
Aleksandr Radchenko Jan 21, 2022 5:06PM ET
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it's going down under control. there is a planned decrease in the share price. look at indexes. these graphs look exactly the same. no sudden drop. there is still at least 10% to go down on the chart. perhaps even 15%, but no more than that. soon we will see a clear signal.
Bradley Jeko
Bradley Jeko Jan 21, 2022 5:06PM ET
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Aleksandr Radchenko I’ve got some leveraged inverses that benefit from a slow drip. But, I don’t see any catalysts to bring about more upside. When they tried to bump the rates up back in 2018, look what happened. Liquidity will dry up. Funds will ALWAYS move to safety for an equivalent return. That’s big money that will leave.
Brian Edwards
Brian Edwards Jan 21, 2022 4:51PM ET
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Amazing that even with vaccines Biden has been able to not only have more deaths while he has been in office than Trump before vaccines were out, cause the highest inflation in 40+ years, cause the lowest labor force participation in modern history, cause supply chain shortages and Soviet-style empty shelves, and have the greatest drop in presidential approval during his first year than any other president in modern history even with the media spitting out 24/7 North-Korea style propaganda for him. This is what leftism does to countries. They weaponized COVID during 2020 because it was an election year, and even when handed a silver platter Biden has managed to ***things up even worse than during the pandemic. Best of luck in mid-terms and 2024 dems.
Janson Hicks
Janson Hicks Jan 21, 2022 4:51PM ET
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Brian Edwards: This post is nonsense. All this finger pointing is a waste of time. Everything that is happening and that has happened is the result of poor economic and tax policy by both Democratic and Conservative parties over the years. Both parties have handled the pandemic poorly, however, it's a pandemic... While people are divided over red vs. blue parties and ideals politicians are united in taking money from the masses.. so please stop spreading this nonsense. Also.. some notorious Republicans voted Democratic last year... Who would have guessed..
Chris Hall
Chris Hall Jan 21, 2022 4:51PM ET
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cant talk facts to these people the propaganda machines have utterly scrambled their brains... just sheep grazing around now spitting no sense reality to every platform imaginable. Really all you have to do is look at the GOP and Qanon that 90% of them believe, say no more! no need to add any other fact
Ac Tektrader
Ac Tektrader Jan 21, 2022 4:36PM ET
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the bad news at netflix is not the reason the markets are tanking. these writers are too young and inexperienced to be writing for a major news wire.
Ranjit kumar
Ranjit kumar Jan 21, 2022 2:46PM ET
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so Netflix is now new parameter for economy growth...ha ha ha
cedrik marchand
cedrik marchand Jan 21, 2022 2:46PM ET
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every negative news 8s
cedrik marchand
cedrik marchand Jan 21, 2022 2:46PM ET
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every negative news 8s
Jurgen Daub
Jurgen Daub Jan 21, 2022 2:46PM ET
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the masses need a scapegoat, first the dems, now Netflix, who is next? bigfoot?
 
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