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Market Snapshot

https://www.briefing.com/stock-market-update

Dow 34265.37 -450.02 (-1.30%)
Nasdaq 13768.92 -385.10 (-2.72%)
SP 500 4397.94 -84.79 (-1.89%)
10-yr Note +4/32 1.762
NYSE Adv 649 Dec 2615 Vol 1.3 bln
Nasdaq Adv 841 Dec 3544 Vol 5.8 bln

Industry Watch
Strong: Consumer Staples
Weak: Communication Services, Consumer Discretionary, Materials

Moving the Market

-- S&P 500 closes below 200-day moving average (4429)

-- Netflix (NFLX) plunges 22% on disappointing Q1 guidance

-- Concerns about profit margins, valuations, the Fed, and geopolitics

-- Safe-haven trade in Treasuries

S&P 500 loses battle with its 200-day moving average
21-Jan-22 16:20 ET
Dow -450.02 at 34265.37, Nasdaq -385.10 at 13768.92, S&P -84.79 at 4397.94

[BRIEFING.COM] The S&P 500 fell 1.9% on Friday, as de-risking efforts persisted amid an inclination to sell into strength, disappointing Q1 guidance from Netflix (NFLX 397.50, -110.75, -21.8%), deteriorating technical factors, and a flight to safety in Treasuries.

The Nasdaq Composite declined 2.7%, the Dow Jones Industrial Average declined 1.3%, and the Russell 2000 declined 1.8%.

Eight of the 11 S&P 500 sectors fell at least 1.0%, including the communication services sector with a 3.9% decline. The consumer staples sector (+0.02%) closed fractionally higher.

The session began with Netflix weighing on sentiment after the company guided for slower subscriber growth and below-consensus revenue for Q1, as well as a smaller operating margin versus Q1 of last year amid higher programming costs.

The operating margin guidance, coupled with a Q1 EPS warning from PPG Industries (PPG 154.74, -4.96, -3.1%), fed into concerns about higher costs eating into profits. In addition, the visceral reaction mirrored the plunge in Peloton (PTON 27.06, +2.84, +11.7%) yesterday, stirring a fear of being invested in high-multiple growth stocks that disappoint.

In Peloton's defense, the company provided reassuring Q2 guidance, and its CEO said prior reporting of its plans to pause production was inaccurate. PTON shares bounced roughly 12% today after falling 24% yesterday.

Back to the broader market, buyers swooped in to defend a violation of the S&P 500's 200-day moving average (4429) early in the session. The benchmark index briefly returned into positive territory, until investors reprised efforts to sell into strength. The benchmark index closed below the key technical level.

This negative price action left buyers mistrustful of the market, imprinting a belief that the dip will keep on dipping until proven otherwise. The CBOE Volatility Index increased 12.7% to 28.85 amid increased hedging interest.

Other worries in the market included what the Fed will say in next week's policy meeting and the Russia-Ukraine conflict that the U.S. is trying to defuse.

The Treasury market was less of a concern, but only because it was acting as a safe-haven trade from equities. The 2-yr yield fell six basis points to 0.99%, and the 10-yr yield fell nine basis points to 1.75%. The U.S. Dollar Index decreased 0.1% to 95.63. WTI crude futures fell 1.3%, or $1.13, to $85.16/bbl.

Friday's economic data was limited to the Conference Board's Leading Economic Index for December, which increased 0.8%, as expected, following a revised 0.7% increase (from +1.1%) in November. On Monday, investors will receive the preliminary IHS Markit Manufacturing and Services PMIs for January.

Dow Jones Industrial Average -5.7% YTD
S&P 500 -7.7% YTD
Russell 2000 -11.5% YTD
Nasdaq Composite -12.0% YTD

Crude futures settle lower amid de-risking efforts
21-Jan-22 15:30 ET
Dow -457.74 at 34257.65, Nasdaq -349.14 at 13804.88, S&P -82.85 at 4399.88

[BRIEFING.COM] The S&P 500 is down 1.8% to trade at session lows amid losses in all 11 sectors.

Eight of the 11 sectors are down over 1.0%, including a 3.5% decline in the communication services sector. The consumer staples sector (-0.1%) outperforms on a relative basis with a 0.1% decline.

WTI crude futures settled lower by 1.3%, or $1.13, to $85.16/bbl.