Stock Market News for Apr 27, 2022

U.S. stocks ended sharply lower on Tuesday as investors digested mixed quarterly reports from a batch of companies, while fears of a global economic slowdown led to an aggressive selloff during the close. The Nasdaq recorded its lowest close since 2020. All the three major indexes ended in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) slid 2.4% or 809.28 points to close at 32,240.18 points.

The S&P 500 lost 2.8% or 120.92 points to close at 4,175.20 points. Tech and communications services stocks were the worst performers.

The Technology Select Sector SPDR (XLK) and the Communication Services Select Sector SPDR (XLC) declined 5.1% and 3.7%, respectively. Ten of the 11 sectors of the benchmark index ended in positive territory.

The tech-heavy Nasdaq fell 4% or 514.11points to finish at 12,490.74 points recording its biggest daily percentage decline since Sep 8, 2020. The index also recorded its lowest close since Dec 14, 2020. 

The fear-gauge CBOE Volatility Index (VIX) was up 24.06% to 33.52. Decliners outnumbered advancers on the NYSE by a 4.71-to-1 ratio. On Nasdaq, a 4.82-to-1 ratio favored declining issues. A total of 12.3 billion shares were traded on Tuesday, lower than the last 20-session average of 12.6 billion.

Tech Stocks Lead Decline Again

Stocks took a bad hit once again on Tuesday after rebounding on Monday, which saw the three indexes closing higher for the first time in almost a week. However, investors’ confidence once again took a hit on Tuesday on worries that rising prices and ongoing geopolitical tensions arising out of the Ukraine Russia war might slow economic growth.

Rising costs have been a worrying factor for the past few months now and Fed has already implemented the first of its multiple planned interest rate hikes last month. Investors have now been worrying about the risk of sharp rate hikes in the coming days.

This saw growth stocks taking a hit once again, with tech companies leading the decline. Investors didn’t wait for the two big tech companies Microsoft Corporation MSFT and Alphabet, Inc. GOOGL to announce their results after the bell. Instead, they went for an aggressive selloff. Shares of Microsoft and Alphabet declined 3.7% and 3.4%, respectively. Alphabet has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Other big tech giants like Meta Platforms, Inc. FB and Apple, Inc. AAPL also fell. Shares of Meta Platforms declined 3.2%, while Apple lost 3.7%. Communications services stocks, which had led Monday’s rally, also suffered. Shares of Verizon Communications Inc. VZ fell 1.7%.

Meanwhile, a slew of companies reported impressive quarterly results but even that couldn’t lift investors’ spirits. Around 80% of the companies that have reported earnings results, have beaten profit expectations but have still failed to impress investors.

Another reason behind investors’ confidence getting dented is poor show from some tech giants. Worries about tech companies escalated after Netflix, Inc. NFLX last week announced that it lost 200,000 subscribers in the first quarter, leading to a massive decline in its stock. The streaming giant’s shares have since dropped 40%, which is impacting the broader tech sector.

However, investors will be closely watching the earnings reports from a batch of big companies that are expected to announce their quarterly results this week.

Economic Data

This is a busy week on the economic data front. Economic data released on Tuesday showed durable goods orders rose 0.8% in March, which came in line with economists’ expectations. Also, business investment rebounded for the month after its first decline in a year. 

In other economic data, released on Tuesday, a survey showed that consumer confidence dropped to 107.3 in April from 107.6 in the prior month.

New home sales declined 8.6% in March to a seasonally adjusted annual rate of 763,000 units. Also, the S&P CoreLogic Case-Shiller 20-city house price index rose 20.2% year over year in February. Rising costs have been impacting the homebuilding market and that is evident from the latest data.

Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.