4:05pm: US equities fall sharply on Nasdaq weakness
US stocks closed down sharply as streaming giant Netflix’s losses dragged the Nasdaq index deeper into correction territory.
The Nasdaq is down more than 7% since Monday, track for its worst week since October 2020.
Netflix’s stock tumbled 23% on Friday after the company’s fourth-quarter earnings report showed a slowdown in subscriber growth -- a huge setback for technology investors.
On the day, the DJIA dropped by 407 points, or 1.18%, to 35,382 and the S&P 500 declined 1.89% to 4,398.
The tech-heavy Nasdaq fell 381 points, or 2.70%, to 13,771.
12:05pm: Wall Street under pressure
US stocks continued lower midday on Friday as investors fretted over prospects of higher interest rates and mulled disappointing results from tech companies, notably streaming service Netflix.
Most major indexes continued to trade in the red, with the Dow Jones Industrials Average shedding 88 points, or 0.2%, at 34,627; while the S&P 500 index and Nasdaq Composite lost 0.6% and 1.0%, respectively.
“Poor earnings provided the catalyst for additional downside yesterday, so today is at least quiet on that front, but until the Fed meeting is out of the way a bounce seems unlikely,” commented Chris Beauchamp, chief market analyst at online trading platform IG.
"Sentiment has reset across the board, and if this is a routine pullback then the time to buy the dip is probably approaching, but next week’s action-packed calendar, full of PMIs, earnings and central bank get-togethers should stay the hand of all but the hardiest of investors," he added.
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10.10am: US stocks down in the dumps
US benchmarks started lower on Friday as market losses were extended to four days in a row.
The Dow Jones shed around 83 points in early deals in New York to stand at 34,631. The S&P 500 lost 35 at 4,447.
The technology-laden Nasdaq plunged around 182 points at 13,971.
Streaming giant Netflix Inc (NASDAQ:NFLX) was in focus and its shares tanked 24% after the tech group forecast slower subscriber growth for this quarter than analysts had been expecting.
The company said it expects 2.5 million new customers in the first three months of this year, compared with 4 million in the same period last year and more than 50% below analysts' forecasts of 5.9 million. Netflix did, however, report better-than-expected profit and revenue in the latest quarter.
Exercise tech group Peloton saw shares drop around 4% to $35.24 each after a CNBC report revealed it was temporarily halting production of bikes and treadmills. The stock slumped 24% on Thursday. Broker Stifel has also upgraded shares to 'Buy' following the release of preliminary second-quarter results.
6.15am: US stocks seen opening mixed
US stocks are expected to open mixed, with the tech-heavy Nasdaq likely to decline after shares of Netflix Inc (NASDAQ:NFLX) slumped in after-hours trading.
Futures for the Dow Jones Industrial Average rose 0.11% in Friday pre-market trading, while the broader S&P 500 index dropped 0.09% and those for the Nasdaq shed 0.38%.
Netflix slumped 20% in after-hours trading after the streaming giant forecast slowing subscriber growth for the first quarter of 2022.
The company said it expects 2.5 million new customers in the first three months of this year, compared with 4 million new subscribers in the same period last year and more than 50% below analysts' forecasts of 5.9 million.
Stocks turned around to close lower on Thursday as jobless claims for the week ending January 15 hit their highest level since October.
The Dow slipped 0.89% points to 34,715, while the S&P 500 eased 1.1% to 4,483 and the tech-heavy Nasdaq fell 1.3% to 14,154.
“More gloom is descending as investors digest some major earnings disappointments, adding to concerns of an accelerating monetary tightening schedule,” commented Richard Hunter, head of markets at interactive investor.
Hunter noted that the Nasdaq has taken the brunt of the selling pressure this year, initially prompted by a rotation to value stocks, but lately exacerbated by some earnings misses which have left the index down by 9.5% in the year to date, and in correction territory being down by over 10% since the recent November high.
“The latest catalysts for another downward lurch came from Netflix and Peloton. The former announced weak subscriber growth which was far short of expectations, and potentially as a result of the post-pandemic boost evaporating, alongside increased competition from the likes of Disney and HBO. The shares fell almost 20%. Peloton, meanwhile, announced that it was halting production for February and March to adjust for lower demand, sending its shares down by 24%.”