Netflix and Amazon were among the biggest losers as Wall Street suffered in the wake of trading being halted in China, as share prices there collapsed.
Both Netflix and Amazon were among the fastest-growing stocks in 2015 as their streaming services registered gains, and in the case of Netflix rolled out around the world.
The main US indexes, the Dow Jones and S&P 500 were down over 1.5% yesterday as the market reacted to the news from China. The Nasdaq was down over 2%.
Both Netflix and Amazon endured sharper declines than the wider markets. Netflix was down 3.9% on the day at US$109.96 and Amazon was down 5.8% at US$636.99 as analysts downgraded both.
At one point yesterday Netflix’s share price was down 8%, before partially recovering.
The tough start to 2016 is in sharp contrast to 2015 when Netflix registered an increase of over 130% in its stock price, making it the best performing stock in the S&P 500 index.
Baird Equity Research was among those to downgrade forecasts for Netflix, noting US subscriber results could be weaker than expected when the streaming company reports its next numbers.
Netflix continues its rapid international rollout, with news coming this week of expected Russian and Indian launches.
Wall Street analyst Moness Crespi Hardt, meanwhile, downgraded Amazon. It said Amazon’s investments in organic growth may not generate as significant returns in 2016 as they did last year.
The enforce halt in trading in China came as the main indexes endured major declines caused by concerns of a slow-down in the country’s manufacturing sector.
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