Nasdaq drops to lowest level since late 2020

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  • Microsoft and Alphabet drop reports after the bell
  • GE down after seeing 2022 earnings at lower end of forecast
  • Tesla tanks a day after Musk strikes a deal to buy Twitter
  • Indices: Dow -2.38%, S&P 500 -2.81%, Nasdaq -3.95%

April 26 (Reuters) – Wall Street ended sharply lower on Tuesday, with the Nasdaq closing at its lowest since December 2020, as investors worried about slowing global growth and a more aggressive Federal Reserve.

Tesla (TSLA.O) fell 12% after investors feared chief executive Elon Musk would sell part of his stake in the electric car maker to help pay for his $44 billion deal to buy Twitter, announced Monday. Read more

Tesla contributed more than any other stock to sharp declines in the S&P 500 and Nasdaq.

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It was the biggest one-day drop for the Nasdaq since September 2020. The tech-heavy index has now fallen 22% from its record close last November.

Previously prized growth stocks have been hammered in recent weeks as investors worry about the impact of rising interest rates on their future earnings.

The COVID-19-induced lockdown in China and an aggressive pivot by major central banks to fight inflation have overshadowed what has been a better-than-expected quarterly earnings season so far.

Alphabet Inc (GOOGL.O) and Microsoft Corp (MSFT.O) both fell nearly 4% before their results after the closing bell. About a third of S&P 500 companies are expected to report results this week.

Alphabet fell another 6.5% in extended trade after its quarterly report disappointed investors. Read more

Apple (AAPL.O), Wall Street’s most valuable company, fell 3.7% in Tuesday’s session ahead of its Thursday report.

“Earnings have been pretty good overall. But that hasn’t really mattered much to the overall stock story. It’s mostly the Fed and other central banks, and now China and of COVID,” said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky.

“I think with the current market situation, in this sell-off and blind fear phase, I think you have more potential for downside risk than upside surprise,” Mayfield said.

The S&P 500 Consumer Discretionary Index (.SPLRCD) lost 4.99% and was among the worst of 11 sector indices, dragged down by Tesla, as well as a 4.6% decline in Amazon ( AMZN.O).

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 30, 2022. REUTERS/Brendan McDermid/File Photo

The S&P 500 energy index (.SPNY) was the only sector to rise, ending up 0.05% as oil prices rebounded following reports that gas supply Russia from Poland would be halted on Wednesday, a development seen as an escalation of tensions between Russia and the West. on Ukraine. Read more

The Dow Jones Industrial Average (.DJI) fell 2.38% to end at 33,240.18 points, while the S&P 500 (.SPX) lost 2.81% to 4,175.2.

The Nasdaq Composite (.IXIC) fell 3.95% to 12,490.74.

The most active trades in the S&P 500

Of the 134 S&P 500 companies that have reported earnings so far, 80.6% have exceeded analysts’ earnings expectations, according to data from Refinitiv. In a typical quarter, 66% exceeded estimates.

General Electric Co (GE.N) fell more than 10% after forecasting annual profits at the low end of its previous estimate. Read more

United Parcel Service Inc (UPS.N) fell 3.5% despite an increase in quarterly adjusted profit, while US hospital operator Universal Health Services Inc (UHS.N) fell nearly 9% after its earnings missed estimates. Read more

Meanwhile, data showed U.S. consumer confidence fell slightly in April, although households planned to buy automobiles and many home appliances, which should help support consumer spending in the second quarter. . Read more

Volume on U.S. exchanges was 12.3 billion shares, compared to an average of 12.6 billion over the past 20 trading days.

Falling issues outnumbered rising ones on the NYSE by a ratio of 4.71 to 1; on the Nasdaq, a ratio of 4.82 to 1 favored the decliners.

The S&P 500 posted no new 52-week highs and 45 new lows; the Nasdaq Composite recorded 24 new highs and 646 new lows.

(This story refiles to correct the fourth paragraph to show that this was the Nasdaq’s biggest one-day drop since September 2020, not September 2008)

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Reporting by Bansari Mayur Kamdar in Bengaluru and Noel Randewich in Oakland, California; Editing by Anil D’Silva, Sriraj Kalluvila and Aurora Ellis

Our standards: The Thomson Reuters Trust Principles.

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