Day Traders Diary

4/22/22

The major averages plunged on Friday, pulling the Dow Jones Industrial Average and S&P 500 down for consecutive weekly declines, as traders weighed a raft of corporate earnings and rising interest rates. The Dow Jones fell 981 points, or 2.8%, to 33,811 for its worst day since 2020. The S&P 500 fell 2.8% or 121 points to 4,271, for its lowest day since March. The Nasdaq Composite declined by 2.6% or 335 points to 12,839. Friday's loss was the biggest for the Dow since Oct. 28, 2020.

UnitedHealth fell more than 3%, shaving more than 100 points off the Dow. Caterpillar also took out nearly 100 points from the 30-stock average, dropping 6.6% on the day. Goldman Sachs, Home Depot and Visa were also big downside contributors.

Those losses put the Dow down 1.9% for the week, its fourth straight weekly decline and its ninth losing week of the last 11. The S&P 500 fell to a three-week slide, and was down 2.8% on a weekly basis. The Nasdaq was the laggard this week, losing 3.8%.

Companies reporting disappointing quarterly results led the market decline Friday. HCA Healthcare dropped 21.8% and was the worst-performing stock in the S&P 500. The decline came as the company posted weak full-year earnings and revenue guidance.

That led other names in the sector lower. Intuitive Surgical and Universal Health Services each lost about 14%. DaVita fell almost 9.1% and DexCom fell 6.7%.

Verizon shares fell 5.6% after the company reported a loss of 36,000 monthly phone subscribers in the first quarter.

Shares of Gap plunged 18% after the company announced the CEO of its Old Navy division, Nancy Green, is leaving the business this week. Gap also slashed its outlook for net sales growth in fiscal 2022.

Friday's action followed a dramatic reversal Thursday after a speech by Federal Reserve Chairman Jerome Powell dented market sentiment. Powell said during an International Monetary Fund panel that taming inflation is "absolutely essential" and a 50-basis-point hike is on the table for May.

Rates on Thursday jumped on Powell's remarks. On Friday, the benchmark 10-year Treasury yield dipped slightly to around 2.9%.

When asked about the potential of a 75 basis point hike, Loretta Mester, president of the Federal Reserve Bank of Cleveland, told CNBC's "Closing Bell" Friday "we don't need to go there," and said she would support a 50 basis point hike in May.