He’s a technician. The Nasdaq plunged on Wednesday as Netflix slumped after losing customers for the first time in a decade, raising concerns among investors over their bets on high-growth companies due to reported earnings. Netflix Inc. fell 36.6%, heading for its worst day since October 2004, as the company blamed subscriber losses on inflation, war in Ukraine and fierce competition, and still forecast more losses in the future.
High-tech and growth stocks have suffered this year as investors feared that rising interest rates could hurt their earnings going forward. The Nasdaq is down nearly 14% year-to-date, while the benchmark S&P 500 is down 6%. “FAANG stocks are still very important, they generate a lot of profits and investors are investing heavily in them, but as the cycle gets older, some of the importance of growth stocks has diminished, with returns increasing,” Detrick said. .
Shares of Megacap, including Amazon.com Inc, Tesla and Meta Platforms Inc, fell between 2.3% and 5.3%, while streaming peers Walt Disney, Roku and Warner Bros Discovery fell between 4.5 % and 8.3%. “Tech has seen a huge surge in profits after the COVID lows, now the bar is pretty high. It could be a struggle for technology this earnings season,” said Ryan Detrick, chief market strategist at LPL Financial.
The communication services sector fell 3.3%, leading the losses among the 11 major sectors of the S&P 500. However, the S&P 500 and the blue-chip Dow Jones gained ground after some positive earnings reports. Consumer giant Procter & Gamble gained 2.6% after raising its annual sales forecast and IT giant IBM Corp jumped 6.3% as it expected to hit the top of its growth estimate. revenue for 2022. Overall, the earnings season has started on a high note. Of the 60 companies in the S&P 500 index that have reported results so far, nearly 80% have exceeded earnings expectations, according to data from Refinitiv. Overall, 66% exceeded estimates.
As of 10:28 a.m. ET, the Dow Jones Industrial Average was up 247.13 points, or 0.71%, at 35,158.33, the S&P 500 was up 7.70 points, or 0.17%, at 4,469.91, and the Nasdaq Composite was down 89.51 points, or 0.66. %, at 13,530.15. Shares of chip equipment makers Applied Materials and Lam Research rose more than 2.5% each after Dutch-based ASML beat expectations for first-quarter results. US-listed shares of ASML jumped 4.6%.
Meanwhile, the yield on 10-year Treasuries fell to 2.89%, after a meteoric rally that pushed it near the key 3% level earlier in the session. Investors will focus on the Federal Reserve’s “Beige Book” of economic conditions from late February to early April for details on monetary policy tightening plans.
Tesla Inc fell 3.1% ahead of its first-quarter results after the closing bell. Investors will keep an eye on whether the electric automaker sticks to its ambitious 2022 delivery target as its biggest factory in Shanghai grapples with a COVID-19 shutdown and new factories slowly ramp up production. . Advancing issues outnumbered declining issues with a 1.86-to-1 ratio on the NYSE. Falling issues outnumbered advances by a 1.04-to-1 ratio on the Nasdaq. The S&P index recorded 60 new 52-week highs and two new lows, while the Nasdaq recorded 63 new highs and 96 new lows.
Summary of news:
- UNITED STATES STOCK MARKETS – The Nasdaq is in free fall. Netflix Report Negatively Impacts Growth Stocks
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