Media, Tech Stocks Sink Amid Decades-High InflationJune 11, 2022
Financial markets took a sharp tumble again Friday, with media and tech stocks falling across the board amid new fears on Wall Street of a looming recession triggered by a new report on rising inflation.
Major market indexes had their worst declines for the week since January. On Friday, the Dow Jones Industrial Average shed 880 points, or 2.7%, to close at 31,392.79. The S&P 500 fell 2.9% and the tech-concentrated Nasdaq Composite Index fell 3.5%, to 11,340.02.
Netflix shares slid 5.1%, to close at $182.94 — the streamer’s stock is down 69% year to date on concerns that its growth is stagnating. Also fueling the sell-off in Netflix was a downgrade by Goldman Sachs, which cut its rating “neutral” to “sell” and slashed its 12-month price target from $265 to $186/share.
“We have concerns around the impact of a consumer recession as well as heightened levels of competition on demand trends, both in the form of gross adds and churn, margin expansion and levels of content spend,” Goldman Sachs’ Eric Sheridan wrote in a research note Friday.
Shares of Roku, meanwhile, tumbled 10.5% Friday, erasing gains it had made earlier in the week on a speculative rumor that Netflix may be interested in acquiring the company. Sources tell Variety there is no truth to the chatter about Netflix potentially buying Roku.
The broad market decline came after the Labor Department on Friday reported the fastest increase in the consumer-price index in May — up 8.6% compared with a year earlier — since 1981.