Peloton slows its roll, shares drop more than 20%

Benzinga
·2 min read

The S&P 500 continued its 2022 pullback last week, falling further into negative territory for the month of January.

Tech stocks and high-growth stocks once again led the market decline as investors grow increasingly concerned about the negative impact rising interest rates could have on future cash flows. On Wednesday, the tech-heavy Nasdaq Composite closed more than 10% below its November high, officially transitioning into correction territory.

While equity markets were tumbling, oil prices reached their highest levels in seven years following a deadly attack by Yemen’s Houthi rebels on United Arab Emirates capital Abu Dhabi. West Texas Intermediate crude oil prices topped $87 per barrel last week following the attack.

Shares of Activision Blizzard, maker of "Call of Duty" and other popular video game franchises, jumped 35% on Tuesday morning after Microsoft announced a $68.7 billion buyout deal for the company. The Activision Blizzard deal is Microsoft's largest acquisition in history with a price tag more than double its $26.2 billion buyout of LinkedIn in 2016.

Custom home builders are hearing from buyers that they want dedicated home gym space to accommodate equipment such as the popular Peloton bike and other connected devices. One builder even said a buyer told him, "I want to know what the view is going to be from my Peloton bike."
Custom home builders are hearing from buyers that they want dedicated home gym space to accommodate equipment such as the popular Peloton bike and other connected devices. One builder even said a buyer told him, "I want to know what the view is going to be from my Peloton bike."

Peloton shares dropped more than 20% following a CNBC report that the company is temporarily halting production of its exercise bikes and treadmills. In a memo to workers on Thursday, Peloton CEO John Foley said the CNBC report lacked context, but confirmed Peloton is "resetting our production" and considering layoffs.

Netflix chills

Shares of streaming video giant Netflix dropped more than 20% on Friday after the company reported fourth-quarter earnings and revenue beats but warned investors that "added competition may be affecting our marginal growth."

This week, fourth-quarter earnings season continues with reports from Microsoft and Verizon on Tuesday, Tesla on Wednesday and Apple on Thursday.

Among the S&P 500 market sectors, analysts have the highest percentage of "buy" ratings within the Energy sector at 67%, according to FactSet.

Economic numbers

Following another rough week for the stock market, Wall Street will get more economic updates on Wednesday when the Federal Reserve releases its latest interest rate decision and accompanying policy statement and on Thursday when the Bureau of Economic Analysis releases its preliminary estimate of fourth-quarter U.S. GDP growth.

Benzinga is a financial news and data company headquartered in Detroit.

This article originally appeared on Detroit Free Press: Peloton slows its roll, shares drop more than 20%