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Wall Street slide deepens after Netflix disappointment

01/21/2022 | 02:00pm EDT

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.)

* Netflix plunges, weighs on Disney, media companies

* Wall Street main indexes headed for weekly declines

* Focus turning to Fed meeting for clarity on policy

* Indexes down: Dow 0.41%, S&P 0.81%, Nasdaq 1.24% (Updates with mid-afternoon trading)

Jan 21 (Reuters) - Wall Street's main indexes dropped on Friday as Netflix shares plunged after a weak earnings report that also weighed on rivals, putting stocks on course to close out a gloomy week on a sour note.

The benchmark S&P 500 was set for 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 21%, weighing on the S&P 500 and the Nasdaq, after the streaming giant forecast weak subscriber growth. Shares of competitor Walt Disney fell 5.8%, dragging on the Dow, while Roku slid 6.5%.

Netflix's share decline “seems to be a big overshadow of the markets today but we have also seen weakness in tech in general since the start of this year," said Anu Gaggar, global investment strategist at Commonwealth Financial Network.

The Dow Jones Industrial Average fell 143.07 points, or 0.41%, to 34,572.32, the S&P 500 lost 36.52 points, or 0.81%, to 4,446.21 and the Nasdaq Composite dropped 175.38 points, or 1.24%, to 13,978.65.

Communication services was the biggest declining of the 11 S&P 500 sectors, dropping 2.4%. Defensive sectors real estate, consumer staples and utilities were the lone sectors in positive territory, rising modestly.

Stocks have gotten off to a rocky 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. The benchmark S&P 500 is down nearly 7% so far this year.

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,” Gaggar said.

Apple, Tesla and Microsoft are among the large companies due to report next week in a busy week of earnings results.

Declining issues outnumbered advancing ones on the NYSE by a 2.50-to-1 ratio; on Nasdaq, a 2.65-to-1 ratio favored decliners.

The S&P 500 posted five new 52-week highs and 22 new lows; the Nasdaq Composite recorded 10 new highs and 954 new lows. (Reporting by Lewis Krauskopf in New York, Shreyashi Sanyal and Bansari Mayur Kamdar in Bengaluru; Editing by Maju Samuel and Cynthia Osterman)

© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
APPLE INC. 4.08% 149.64 Delayed Quote.-15.73%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.87% 0.716 Delayed Quote.-2.23%
BRITISH POUND / US DOLLAR (GBP/USD) 0.09% 1.26275 Delayed Quote.-6.75%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.33% 0.7853 Delayed Quote.-1.03%
DJ INDUSTRIAL 1.76% 33212.96 Real-time Quote.-10.19%
EURO / US DOLLAR (EUR/USD) -0.01% 1.07317 Delayed Quote.-5.61%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.05% 0.012892 Delayed Quote.-4.10%
MICROSOFT CORPORATION 2.76% 273.24 Delayed Quote.-18.76%
NASDAQ COMP. 3.33% 12131.13 Real-time Quote.-22.46%
NETFLIX, INC. 1.98% 195.19 Delayed Quote.-67.60%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.83% 0.6534 Delayed Quote.-5.22%
ROKU, INC. 8.96% 96.47 Delayed Quote.-57.73%
S&P 500 2.47% 4158.24 Real-time Quote.-12.76%
TESLA, INC. 7.33% 759.63 Delayed Quote.-28.12%
WALT DISNEY COMPANY (THE) 3.51% 109.32 Delayed Quote.-31.82%
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Financials (USD)
Sales 2022 199 B - -
Net income 2022 73 246 M - -
Net cash 2022 63 054 M - -
P/E ratio 2022 28,0x
Yield 2022 0,89%
Capitalization 2 044 B 2 044 B -
EV / Sales 2022 9,95x
EV / Sales 2023 8,57x
Nbr of Employees 181 000
Free-Float 99,7%
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Mean consensus BUY
Number of Analysts 48
Last Close Price 273,24 $
Average target price 361,47 $
Spread / Average Target 32,3%
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Satya Nadella Chairman & Chief Executive Officer
Bradford L. Smith President & Chief Legal Officer
Amy E. Hood Chief Financial Officer & Executive Vice President
James Kevin Scott Chief Technology Officer & Executive VP
Matthias Troyer Partner Research Manager
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