Wall Street: Nasdaq tumbles to lowest close since late 2020

Wall Street ended sharply lower on Tuesday, with the Nasdaq closing at its lowest since December 2020 as investors worried about slowing global growth and a more aggressive Federal Reserve.

Tesla slumped 12 per cent after investors worried that chief executive Elon Musk might sell some of his stake in the electric car maker to help pay for his $44 billion deal to buy Twitter, announced on Monday.

Tesla contributed more than any other stock to the S&P 500 and Nasdaq's steep declines.

It was the steepest one-day drop for the Nasdaq since September 2020. The tech-heavy index has now fallen 22 per cent from its record high close last November.

Previously-prized growth stocks have been hammered in recent weeks as investors fret about the impact of higher interest rates on their future earnings.

China's Covid-19 led lockdown and an aggressive pivot by major central banks to fight inflation have overshadowed what has been a better-than-expected quarterly earnings season so far.

Alphabet Inc and Microsoft Corp both dropped almost 4 per cent ahead of their results after the closing bell. About a third of the S&P 500 companies are set to report results this week.

Alphabet fell another 6.5 per cent in extended trade after its quarterly report disappointed investors.

Apple, Wall Street's most valuable company, fell 3.7 per cent in Tuesday's session ahead of its report on Thursday.

"Earnings broadly have been pretty good. But it hasn't really mattered very much to the overall stock story. It's mainly about the Fed and other central banks, and now China and Covid," said Ross Mayfield, an investment strategist at Baird in Louisville, Kentucky.

"I think with where the market is right now, in this indiscriminate selling and fear phase, I think you've got more potential for downside risk than you have for an upside surprise," Mayfield said.

The S&P 500 consumer discretionary index lost 4.99 per cent and was among the worst of 11 sector indexes, pulled lower by Tesla, and also by a 4.6 per cent decline in Amazon.

The S&P 500 energy index was the only sector to rise, ending up 0.05 per cent as oil prices rebounded following reports that Russian gas supplies to Poland would be halted Wednesday, a development viewed as an escalation of tensions between Russia and the West over Ukraine.

The Dow Jones Industrial Average fell 2.38 per cent to end at 33,240.18 points, while the S&P 500 lost 2.81 per cent to 4,175.2.

The Nasdaq Composite dropped 3.95 per cent to 12,490.74.

Of the 134 companies in the S&P 500 that reported earnings so far, 80.6 per cent topped analysts' profit expectations, according to Refinitiv data. In a typical quarter, 66 per cent beat estimates.

General Electric Co tumbled more than 10 per cent after forecasting full-year earnings at the low end of its previous estimate.

United Parcel Service Inc fell 3.5 per cent despite reporting a rise in quarterly adjusted profit, while US hospital operator Universal Health Services Inc slumped nearly 9 per cent after its earnings missed estimates.

Meanwhile, data showed US consumer confidence edged lower in April, though households planned to buy automobiles and many appliances, which should help underpin consumer spending in the second quarter.

Volume on US exchanges was 12.3 billion shares, compared with a 12.6 billion average over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 4.71-to-1 ratio; on Nasdaq, a 4.82-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 45 new lows; the Nasdaq Composite recorded 24 new highs and 646 new lows.

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