US market weekly: US stocks down for third consecutive week

US-weekly
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Wall Street was closed on Monday (Jan 17) for Martin Luther King Jr. Day.

US stocks ended lower on Tuesday as the yields on U.S. government bonds skyrocketed. Investors are anticipating the Fed to take harsh measures and will raise interest rates as early in March in order to contain inflation. All three major stock indexes ended in negative territory.

Indices closed sharply lower on Wednesday owing to skyrocketing yields on U.S. government bonds. Strong earnings results and robust housing data failed to instill investors’ confidence. All three major stock indexes ended in negative territory.

US stocks continued to fall sharply on Thursday after a choppy trading season as investors remained concerned regarding the recent spike in government bond yields. Geopolitical tensions and some weak economic data also dented market participants’ confidence. All three major stock indexes ended in red.

Stocks ended a volatile week lower on Friday, with investors rotating further away from growth and technology stocks. Nasdaq post worst weeks since pandemic start as Netflix reported quarterly results below estimates. Over the week, S&P fell by 5.7%, while the Dow fell 4.6%. 

Weekly market stats with IND

Let’s see the major developments during the week:

Steep fall in indices: Three weeks into 2022, the S&P 500 has dropped more than 6%, as 10-year rates have risen from 1.5% to as high as 1.9% (a two-year high). The Nasdaq slumped roughly 7.5%, its biggest weekly drop since the start of the pandemic. Weakness in semiconductor shares weighed on tech stocks, weakness in automakers and retailers dragged down the consumer discretionary sector while declines in financial giants JPMorgan Chase and Goldman Sachs took a toll on financial services shares. 

A more than 20% decline in Netflix shares following its fourth-quarter earnings report contributed to the indexes’ losses on Friday. More than two-thirds of the companies within the S&P 500 are now in a technical correction or down at least 10% from their record high. 

Jobs Update: An  unexpected jump in weekly jobless claims seemed to have the biggest impact on markets. Claims rose to 286,000, the most since mid-October. Many observers attributed the increase in claims to the spread of the omicron variant of the coronavirus.

Treasury Yield: Ten-year Treasury yields touched 1.9% last week before settling back by week's end. While rates are still quite low by historical standards, the trajectory of the move has rattled equity markets, as rates rose more than 0.5% since early December. The weaker-than-expected jobless claims report and rising volatility in equity markets appeared to result in the flattening of the Treasury yield curve as yield fell back sharply to 1.74%.

Covid Update: coronavirus has picked up pace in the US. With the Omicron variant spreading rapidly, the country is averaging more than 7 lakh new cases a day, far more than at any previous point in the pandemic. Around 63% of the country is now fully vaccinated. The overall number of Covid cases stands around 70 million.

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