Stock Market News for Apr 25, 2022
U.S. stocks ended sharply lower on Friday, recording their worst day since 2020, as a fresh batch of corporate earnings and sharp near-term rate hike prospects led to massive selloffs. All the major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 2.8% or 981.36 points to end at 33,811.40 points. This was the blue-chip index’s worst daily percentage decline since Nov 26, 2021.
The S&P 500 declined 2.8% or 121.88 points to close at 4,271.78 points. Materials and health care stocks were the worst performers.
The Materials Select Sector SPDR (XLB) and the Health Care Select Sector SPDR (XLV) each declined 3.7%. All the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slid 2.6% or 335.36 points to finish at 12,839.29 points.
The fear-gauge CBOE Volatility Index (VIX) was up 24.38% to 28.21, ending at its highest level since mid-March. A total of 11.66 billion shares were traded on Friday, lower than the last 20-session average of 11.67 billion.
Disappointing Earnings Results Dent Investors’ Sentiment
The earnings season is in full swing but some big names have so far delivered disappointing results. Friday saw a batch of big companies announcing their quarterly results. The biggest disappointment came from healthcare companies.
Shares of UnitedHealth Group Incorporated UNH declined 3.1%. UnitedHealth Group Incorporated has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
One of the biggest losers was Intuitive Surgical, Inc. ISRG. Its shares plummeted 14.3% despite the company beating both earnings and revenue estimates. Intuitive Surgical reported first-quarter 2022 adjusted earnings of $1.13 per share, beating the Zacks Consensus Estimate of $1.28 per share.
Besides a few other big names such as Caterpillar, Inc. CAT and The Home Depot, Inc. HD declined 6.6% and 3.3%, respectively, which took its toll on the Dow. The overall negative sentiment continued almost throughout the day that took a toll on the broader market.
Rate Hike Prospect Worry Investors
Rising prices have been worrying people for quite some time. The Fed in its last meeting hiked interest rate by 25 basis points in a bid to check surging inflation that has hit a 41-year high. There have been indications from Fed officials that rates could be hiked by 50 basis points in the upcoming meeting.
Concerns about risk from sharp hikes in interest rates once again escalated after Fed Chair Jerome Powell on Thursday said that a 50-basis point hike in interest rates is likely to happen when Fed officials meet in May. This dented investor sentiment once again on Friday taking a toll on stocks, with the broader market suffering.
No economic data was released on Friday.
Weekly Roundup
Markets have been suffering over the past month, with all the three indexes recording losses for the week once again. The Dow ended 1.9% lower for the week, recording its fourth straight weekly decline. The blue-chip index has now ended lower in the last nine of the 11 weeks.
The S&P 500 lost 2.8% for the week, while the Nasdaq posted a 3.8% loss for the week. Both the indexes recorded their third consecutive weekly losses.
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