By Yasin Ebrahim
Investing.com – The Nasdaq slumped Friday, falling below the key 14,000 level, but remained under pressure as a Netflix-led rout in tech weighed on sentiment.
The NASDAQ Composite slumped 2%, though remained above the worst levels of the day. The S&P 500 fell 1.4% and the Dow Jones Industrial Average slipped 1%, or 335 points.
Sentiment on tech was hurt as Netflix (NASDAQ:NFLX) kicked off the start of quarterly earnings for big tech with disappointing guidance that sent its shares plummeting about 22%.
Netflix reported earnings that topped expectations, and revenue that was in-line, but its fiscal first quarter forecast for subscriber growth fell short of estimates, raising worries about peaking growth in the U.S. and Canada.
“Netflix’s first mover advantage and large subscriber base provides the company with a nearly insurmountable competitive advantage over its streaming peers. However, Netflix appears to have hit a ceiling on subscribers in UCAN,” Wedbush said in a note after reiterating its underperform rating and $342 on the stock.
The slump in Netflix sent shockwaves across media stocks. ViacomCBS (NASDAQ:VIAC), Walt Disney (NYSE:DIS) and Discovery (NASDAQ:DISCA) were under pressure.
The bleeding in tech was stemmed somewhat by the dip-buying in semiconductor stocks, with Silicon Laboratories (NASDAQ:SLAB), Texas Instruments (NASDAQ:TXN) and NXP Semiconductors (NASDAQ:NXPI) leading to the upside.
Materials also continued to the broader market slump, paced by an 8% dip in Ecolab (NYSE:ECL) after the company cut its fourth quarter guidance following the impact of ongoing supply chain disruptions.
Amazon.com (NASDAQ:AMZN), Tesla (NASDAQ:TSLA), and Etsy (NASDAQ:ETSY) were the biggest drag on the consumer discretionary sector.
Etsy Inc (NASDAQ:ETSY) fell more than 5% as Oppenheimer cut its price target on the stock to $225 from $285, citing a “decline in comparable valuations.”
It wasn’t all red on Wall Street as defensive concerns of the market including consumer staples and utilities found support.
The broader market move lower coincided with a bolt of volatility that could be exacerbated by the expiring of single stock options totaling about $1.28 trillion later on Friday.
In other news, Peloton Interactive (NASDAQ:PTON) jumped 13% following a rout a day earlier after the company pre-reported higher revenue for fiscal Q2 of $1.14 billion, up from $1.06 billion a year ago.