Stock Market: Dow Sinks 981 Points in Wide Market Washout

Powell’s comments about a rate hike continued to be a problem for equities on Friday, as major indexes suffered their most considerable single-day losses since March.

Thursday’s downtrend poured over into Friday’s trade. The entire market worked together to produce a week-closing stinker.

Yesterday’s comments from Federal Reserve Chair Jerome Powell, which almost guarantee that we will see a 50-basis point Fed funds rate increase following the central bank’s May meeting, were another indicator of sentiment.

Jamie Cox, the managing partner of Harris Financial Group, says that when a Fed official proposes a 50-basis-point hike, the markets begin to price in 75basis-point increases. “It’s madness. Investors would do well to ignore the price craziness and wait for the rates to change. “

Dean Smith, the chief strategist at FolioBeyond’s investment platform FolioBeyond, says that the Fed is ready to inflict economic pain on the country to reach its inflation goals.

John Butters is the senior earnings analyst at FactSet. He notes that the S&P 500 Index has reported single-digit earnings growth since the fourth quarter of 2020. That is partly due to difficult year-over-year comparisons as well as macro headwinds.

The hawkish position is giving investors pause. According to Brian Price, head of investment management at Commonwealth Financial Network, many are left to assess the impact on profit margins or equity multiples in the future,” Brian Price, head investment management at Commonwealth Financial Network. Although we are still early in the earnings season, higher costs have already impacted profit margins, and there isn’t any relief. “

Friday’s Financial Results Calendar Did Not Do Much To Improve The Market’s Earnings Situation.

All major indexes suffered from a lot of losses. All 30 Dow Jones Industrial Average (-2.8% – 33,811) finished in red. This was true for 489 stocks in the S&P 500 (-2.8% – 4,271). The Nasdaq Composite was 2.6% lower at 12,839, with tumbles for all but four components of the Nasdaq 100. The 100 most important non-financial components in the Nasdaq Composite are the Nasdaq100. 

Russell 2000, a small-cap Russell 2000, was not immune to Friday’s woes. It fell 2.6% to 1,940. U.S. crude oil futures dropped 1.7% to $102.07 per barrel. To settle at $1,934.30 per ounce, gold futures fell 0.7%

Bitcoin fell below $40k and plunged 4.1% to $39499.01. HCA Healthcare (NYSE:HCA), a Tennessee-based hospital operator, saw its full-year guidance decrease by 21.8% due to rising labor costs. As a result, the stock plunged 21.8%.

HCA anticipates 2022 earnings per share between $16.40 and $17.60, a decrease from its previous forecasts for $18.40 to $19.20 per share, and revenue of $59.5billion to $61.5billion, 500 million less than its previous guidance.

Many healthcare stocks suffered from the adverse earnings reaction, including Tenet Healthcare (NYSE:THC), -14.0%, and Community Health Systems(NYSE:CYH), -17.9%. Conversely, Kimberly-Clark (NYSE:KMB), a consumer staples stock, saw an 8.1% increase in earnings.

KMB reported adjusted earnings at $1.35 per share for $5.1 billion in first-quarter revenue. That was more than analysts had expected. Cottonelle, the maker of toilet paper, also increased its full-year revenues and forecasts for organic growth.

Arun Sundaram, CFRA Research analyst, maintained a stock’s sell rating. KMB is not as well-positioned as its more diverse peers to navigate the historic inflationary cycle,” an analyst wrote a note.