(New York = Yonhap News) Yonhap Infomax Correspondent Young-sook Yoon = The New York stock market fell as tech stocks continued to sell amid disappointing quarterly results from companies and concerns about the Federal Reserve (Fed) tightening.
At the New York Stock Exchange (NYSE) on the 21st (Eastern Time), the Dow Jones Industrial Average closed at 34,265.37, down 450.02 points (1.30%) from the previous day.
The Standard & Poor’s 500 Index closed at 4,397.94, down 84.79 points (1.89%) from the battlefield, and the Nasdaq Index, centered on technology stocks, closed at 13,768.92, down 385.10 points (2.72%) from the battlefield.
The S&P 500 has broken below its 200-day moving average for the first time since June 2020.
The S&P 500 and Nasdaq Composites fell 5.68% and 7.55%, respectively, in one week, their biggest weekly decline since March 2020. The Dow fell 4.58% during the same period, its biggest weekly decline since October 2020.
The Nasdaq has fallen 12% this year. This was the worst start since 2008 as of the first 14 trading days of January, according to Dow Jones Market Data.
Investors remain vigilant ahead of the Fed’s regular Federal Open Market Committee (FOMC) meeting scheduled for next week, 25-26.
The 10-year U.S. Treasury yield rose to 1.9% for the week this week amid growing concerns about the Fed’s early rate hike. The steep rise in interest rates is relatively damaging to risky assets, especially technology stocks.
The yield on the 10-year U.S. Treasury note fell to 1.75% during the day due to a retracement following a recent steep rise. A fall in interest rates means an increase in prices. Treasury bond prices rose again amid risk-averse sentiment.
The fact that Netflix, one of the major technology companies, did not meet market expectations ahead of earnings announcements of major companies such as Apple, Microsoft and Tesla next week also contributed to the deterioration of investor sentiment.
Shares of Netflix, which announced earnings after the market close the day before, fell more than 21%.
Although Netflix reported better-than-expected earnings in the fourth quarter of last year, it is expected that the number of new subscribers in the first quarter of this year will reach 2.5 million, far below Wall Street’s estimate.
Morgan Stanley lowered its investment rating on Netflix from ‘overweight’ to ‘equal weight’ and drastically lowered its target price from $700 to $450.
Shares of its competitor, Walt Disney, also fell about 7%.
The stock prices of large stocks Amazon and Tesla fell more than 5%, and the stock price of Meta fell more than 4%.
The share price of exercise equipment maker Peloton, which fell sharply on the news of the suspension of production of some products the day before, rebounded by 11%.
Bitcoin price fell more than 10% below $40,000 as risky assets took a hit.
Oilfield services company Schlumberger reported better-than-expected earnings and sales, but shares fell nearly 2%.
Shares of industrial coatings maker PPG Industries also reported better-than-expected earnings, but fell more than 3% on news that raw material costs rose by more than 30%.
According to Credit Suisse, the quarterly earnings of S&P 500 companies that have announced their fourth quarter earnings so far have exceeded expectations by an average of 5.9%.
According to Wells Fargo, the stock’s share price rose only 0.3% on average during the day immediately after the earnings release.
Investors are also paying attention to geopolitical tensions surrounding Ukraine. Diplomatic efforts continue, but war tensions are escalating as Russia and the West increase military deployments into Ukraine and surrounding areas.
The US-Russian diplomatic chiefs’ talks that took place on that day ended without any results.
New York Stock Exchange experts pointed out that there are many factors that are deteriorating investor sentiment.
Georgina Taylor, multi-asset fund manager at Invesco, told the Wall Street Journal: “Price adjustments in response to central bank policy changes, inflation that increases cost pressure, and geopolitical risks are all at work. There is,” he analyzed.
Jim Paulson, chief investment strategist at Reutshold Group, told CNBC: “Given the stock market’s emotional downtrend over the past few days, the market’s movements depend entirely on technical support and the fundamentals have stopped.”
“For investors and traders to consider the fundamentals, the market must first stabilize some and the fear will dissipate,” he said.
According to the Chicago Mercantile Exchange (CME) FedWatch, the Federal Funds (FF) interest rate futures market predicted an 89.7% chance of a Fed rate hike in March this year.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) recorded 28.85, up 3.26 points (12.74%) from the battlefield.
ysyoon@yna.co.kr
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2022/01/22 06:35 Send
