Stocks sank on Friday, putting the Dow Jones Industrial Average and S&P 500 on pace for consecutive weekly declines, as traders weighed a raft of corporate earnings and rising interest rates.
The Dow fell 700 points, or 2%. The S&P 500 was 2.1% lower, and the Nasdaq Composite declined by 2%.
Those losses put the Dow down 1% for the week, on track for its fourth straight weekly decline. The S&P 500 was headed for a three-week slide, and was down 2% week to date. The Nasdaq was the laggard this week, losing 3.3%.
Companies reporting disappointing quarterly results led the market decline Friday. HCA Healthcare dropped 18% 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 lost 13% and 10%, respectively. DaVita fell almost 7% and Dexcom fell 5.5%.
Verizon shares fell 6% after the company reported a loss of 36,000 monthly phone subscribers in the first quarter.
Shares of Gap plunged 19% 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.
Snap shares fell 1.7% as the social media platform reported first-quarter revenue short of expectations even after showing strong growth in daily users.
Friday’s action followed a dramatic reversal Thursday after a speech by Federal Reserve Chairman Jerome Powell dented market sentiment. The Dow ended the day more than 300 points lower, while the S&P 500 dropped nearly 1.5%. The tech-heavy Nasdaq Composite bore the brunt of the sell-off on surging rates, sliding 2%.
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.
“Central bank hawkishness and bond yields back up are again moving markets,” Ross Mayfield, investment strategy analyst at Baird, told CNBC. “Nothing especially new but a fresh reminder of the monumental shift underway on the policy front. Powell did note there may be benefit to front-loading hikes and being aggressive early, this sets them up for the potential to cut later on if the economy stumbles.”
Rates on Thursday jumped on those remarks. On Friday, the benchmark 10-year Treasury yield dipped slightly to around 2.91%.
“Despite April posting the strongest average price increase since World War II, and second-highest frequency of advance, the prospects of more aggressive rate tightening by the Federal Reserve in response to an inflation rate not seen since the early 1980s continues to weigh on stock prices and investor nerves,” Sam Stovall, chief investment strategist at CFRA Research, told CNBC.