By Mark DeCambre and Barbara Kollmeyer
U.S. equity gauges on Friday ended sharply lower, capping a withering week for investors highlighted by the biggest weekly slide for the S&P 500 and the technology-laden Nasdaq Composite since March 2020.
How are stock indexes trading?
The S&P 500 /zigman2/quotes/210599714/realtime SPX +2.47% lost 84.79 points, or 1.9%, to close at 4,397.94.
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.76% shed 450.02 points, or 1.3%, to 34,265.37.
The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +3.33% gave up 385.10 points, or 2.7%, breaching a psychological round-number level at 14,000 to close at 13,768.92.
For the week, the Nasdaq Composite logged a 7.6% drop, which is its worst such performance since March 20, 2020. The S&P 500 booked a 5.7% decline, also for its steepest such fall since March 2020, and the Dow logged a 4.6% weekly slide for the holiday-shortened week, its worst since Oct. 30, 2020.
What’s driving the markets?
It was the week that was on Wall Street, a holiday-abbreviated stretch of trade that might have felt like an epoch for bullish investors.
A bearish pall is being cast over the market and volatility has become the new normal, with investors stomaching notable intraday prices swings to conclude a withering week.
The S&P 500 notched its third straight weekly loss, according to FactSet data. Nearly all the S&P 500’s 11 sectors ended lower for the day, led by communication services /zigman2/quotes/210600403/delayed XX:SP500.50 +2.62% , down 3.9%, and consumer discretionary /zigman2/quotes/210600228/delayed XX:SP500.25 +3.47% , off 3.1%. Consumer staples /zigman2/quotes/210600216/delayed XX:SP500.30 +1.09% , seen as a defensive play, were the exception, finishing flat on the day.
The stats were worse for the Nasdaq Composite, which booked its fourth straight weekly loss, after a sixth straight daily decline, marking its longest such losing streak since 2012.
After entering correction territory on Wednesday, the Nasdaq Composite has only deepened that rout. The index is down around 15% from its record close in November, nearing the 20% decline from a recent peak that would meet the commonly used definition for a bear market.
Much discussion around the recent bout of weakness in equities has been centered on the rise in yields and the prospect for higher benchmark rates. Markets have been dogged by a bond market selloff and fears of Federal Reserve tightening to combat surging inflation, and that has particularly hit rate-sensitive technology stocks.
Both Wednesday and Thursday saw indexes log gains early in the day only to surrender them later and on Friday losses deepened into the close, delivery another gut-punch for optimistic investors.
A bumpy start to earnings season also has dented investor confidence, with a string of downbeat bank results, and gloom about Netflix /zigman2/quotes/202353025/composite NFLX +1.98% , after the streaming service reported far weaker than expected subscriber growth numbers .