The stock market opened the new year with a wild ride on Monday that saw a sell-off spooked by fears about economic slowdown in China and rising tensions in the Middle East.
Netflix shares took a beating early on after an analyst downgraded the company to neutral — a sign of how little it took to spark a sell-off amid Monday’s roller coaster ride. The Internet giant’s shares were down as much as 7% at one point Monday but recovered some to end the day with a 3.9% loss. Amazon also felt the heat with a 5.8% drop to close at $636.99.
Wall Streeters in the U.S. awoke to news of a crash in mainland China indexes that spurred regulators to halt trading early on Monday. The Dow Jones index opened Monday with a nearly 400-point drop. It rebounded some within the first hour of trading but then plunged more than 450 points. The Dow recovered again to close with a 276-point loss, or 1.6%. That marked the Dow’s worst start to a calendar year since 2008, according to TheStreet.
The volatility marked a grim start to 2016. But one prominent media biz analyst cautioned against drawing any conclusions from Monday’s gyrations. “It is Day One,” said Michael Nathanson of MoffettNathanson Research.
The NASDAQ was almost as volatile, dropping more than 160 points at its weakest but finishing out with a 104-point loss, or 2.1%. The S&P 500 shed as much as 2.5% of its value at one point but closed at with a 1.5% loss.
Netflix shares felt the pinch of a downgrade from Baird Equity Research downgraded the stock to neutral from outperform and set a new price target of $115. Netflix was the best-performing stock in the S&P 500 in 2015, closing the year with a more than 130% gain. On Monday, shares closed at $109.96.
Other media stocks were dragged down by the plunge in the major indexes. AMC Networks and Time Warner bucked the downtrend to eke out sub-1% gains by day’s end. Viacom, Comcast, Fox, CBS, Fox and Discovery were down in the 1%-2% range.