Market Rebounds in Volatile Trading; Netflix, Meme Stocks Extend Losses – Deadline
Wall Street had a wild start to the week, with stock markets rebounding to end higher on Monday after plunging on concerns over rising interest rates and tensions in Ukraine.
Media stocks mostly ended in positive territory, though AMC and Netflix were notable exceptions, down 7% and 2.6%, respectively. The Dow, Nasdaq and S&P 500 all ended higher after swinging hundreds of points. At first, its damage was quite severe, with the S&P joining the Nasdaq in territory labeled as correction.
Economists typically define a correction as a 10% decline from last December’s high for the tech-heavy Nasdaq. Even after recovering hundreds of points to register a fractional gain today and close at 13,855.13, the index is still down almost 12% in 2022 to date. The Dow Jones also ended the session a fraction higher at 34,364 and the S&P closed at 4,222.62 after regaining nearly 200 points.
Netflix extended its slump, although today’s downturn was only a fraction of Friday’s 22% drop. Analysts and investors hammered the stock Friday on heavy volume a day after the streaming giant released a weak subscriber outlook.
A handful of factors weighing on markets included a Federal Reserve meeting on Tuesday, the prospect of higher interest rates, a bleak outlook for companies reporting profits and a continued decline in the technology sector.
Volatility was a feature of the year at the start. As the earnings season begins, a number of other large-cap companies have offered rather pessimistic comments on the year ahead. This week, Apple, Comcast, AT&T, Verizon, Microsoft and more will weigh in with numbers and sentiment.
The Fed is expected to raise interest rates a few times this year to fight inflation, which is at its highest level in 40 years and could clarify its intentions on Tuesday. Rate anxiety has hit technology and other growth stocks, whose growth has been a major driver for all markets.
Media winners on Monday included ViacomCBS, AMC Networks and Fox, all up 4% each; and Discovery, which added almost 3%. Disney, which fell below $130 at one point during the day, rallied just above break-even, ending at $137.46.