Wall Street closed significantly lower on Friday. The S&P 500 fell 1.9 percent at 4,397.94 points, the Dow Jones index lost 1.3 percent to 34,265.37 points and the Nasdaq ended 2.7 percent lower at 13,768.92 points.
The Nasdaq has lost about 10 percent since a peak in November, moving into correction territory this week. On a weekly basis, the index fell about 7.6 percent. It was the worst week for the tech index since March 2020. The Dow and S&P 500 also lost significant ground this week.
Market analyst Michael Hewson of CMC Markets is concerned that the markets failed to sustain Thursday’s robust gains. “This could be an indication that the losses will rise further next week.”
“The bears are on the ball,” said Jim Reid, strategist at Deutsche Bank. “The S&P 500 is on track for a third week in a row, the first since September 2020.”
Disappointing corporate figures, but also the expectation that interest rate hikes are imminent, weighed on sentiment in recent weeks. Investors are now focused on next week’s Federal Reserve meeting.
On the macroeconomic front, it was announced that the leading indicators in the US rose by 0.8 percent in December.
The euro/dollar traded at 1.1342 Friday evening. The oil price fell in the wake of the stock markets. At a settlement of $85.14, a barrel of West Texas Intermediate became 0.5 percent cheaper. On a weekly basis, a barrel of WTI became almost 2 percent more expensive.
Netflix’s fourth quarter figures were in line with expectations, but the outlook was quite disappointing. For the current first quarter, the streaming service expects 2.5 million new subscribers. This is less than half what analysts were counting on. The analyst consensus for this quarter is 5.8 million new subscribers. Shares lost nearly 22 percent on Friday.
PPG Industries outperformed expectations in the quarter despite ongoing supply chain disruptions. The company posted sales of $4.19 billion. Analysts had expected $4.04 billion, according to FactSet. Net profit fell slightly, from $272 million to $267 million. The stock fell 3 percent.
Schlumberger beat analyst expectations in the fourth quarter with adjusted earnings per share of $0.41, 2 cents more than expected. The CEO of the company is also positive about 2022, with a gradual recovery in demand, an increasingly tight supply and favorable oil prices. The stock fell nearly 2 percent.
Intel will invest more than $20 billion in the construction of two semiconductor plants in Ohio, it announced Friday. The stock closed flat.
After a price loss of about 24 percent on Thursday due to reports of a temporary production stop, Peloton rose almost 12 percent on Friday. Analysts think it’s a good buying opportunity after the recent price drop.