Wall Street's main indexes ended sharply lower on Friday as Netflix shares plunged after a weak earnings report that also weighed on rivals, and stocks ended a gloomy week on a sour note.
The benchmark S&P 500 posted its third straight week of declines, while losses 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.
Netflix shares tumbled, weighing on the S&P 500 and the Nasdaq, after the streaming giant forecast weak subscriber growth. Shares of competitor Walt Disney fell, dragging on the Dow, while Roku also slid.
Tough Tech Rout
"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."
According to preliminary data, the S&P 500 lost 84.51 points, or 1.89%, to end at 4,398.22 points, while the Nasdaq Composite lost 388.47 points, or 2.74%, to 13,765.55. The Dow Jones Industrial Average fell 439.57 points, or 1.29%, to 34,275.82.
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, Tesla and Microsoft are among the large companies due to report next week in a busy week of earnings results.
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