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, S&P 500 were down over 1.5% 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 almost 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 an expected Russian launch.
Wall St. analysts including 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.