US Stocks Slump to New 2022 Lows Friday; Nasdaq Down 12% This Month as Netflix Dives

Last Updated: Friday, January 21, 2022 4:49 PM | MT Newswires

US stocks extended a weeklong slump Friday, deepening January's market losses.

The S&P 500 dropped 1.9% to 4397.94, down 5.7% for the holiday-shortened week and 7.7% in 2022. The Nasdaq Composite fell 2.7% to 13,768.92, taking its loss this month to 12%. The Dow Jones Industrial Average declined 1.3% to 34,265.37, finishing at session lows alongside the other major indexes.

The 10-year US Treasury yield fell 9 basis points to 1.75%, from the vicinity of a two-year high. West Texas Intermediate crude oil retreated $1.01 to $84.54 per barrel after setting a 7-year high above $89 Wednesday.

Bitcoin plunged more than 10% $38,265, a six-month low.

Netflix (NFLX) shares plummeted 22% after the leading provider of streamed entertainment reported disappointing quarterly subscriber growth and provided forward guidance below estimates despite a new price hike in the US and Canada.

The Conference Board's Leading Economic Index rose 0.8% for December, and the group forecast US economic growth of 3.5% this year despite the expected slowdown to a 2.2% annualized rate in Q1.

The US leading indicators gauge "ended 2021 on a rising trajectory, suggesting the economy will continue to expand well into the spring," said Ataman Ozyildirim, senior director of economic research at the Conference Board.

Friday's decline was US stocks' 11th in the new year's first 14 sessions, against the backdrop of inflation at 40-year highs and rapid shift to monetary policy tightening, even as the pandemic continues to slow growth.

The Federal Reserve's rate-setting panel is likely to meet market expectations for a 25-basis-point rate hike in March by signaling that increase Jan. 26 at the end of its two-day meeting, Morgan Stanley economists said. Another key issue for the Fed is the pace at which it will start to draw down its debt holdings, with guidance on that issue also possible next week, according to the note.

Earnings floodgates open next week with reports from the likes of Microsoft (MSFT) Tuesday, Tesla (TSLA) Wednesday and Apple (AAPL) Thursday, all after the market close.

Union Pacific (UNP) managed a gain of 1.8% Friday, the day after beating fourth-quarter estimates and offering an upbeat outlook for the year. Paints and coatings supplier PPG (PPG) headed in the opposite direction, losing 3.1% after warning of slowing demand and unveiling plans to raise prices.

Friday's drop pushed the S&P 500 below its 200-day moving average, a widely watched trendline, for the first time in nearly 19 months. The Nasdaq bounced off its 200-day average a week ago and has dropped 7.6% since.

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