By Yasin Ebrahim

Investing.com – The S&P 500 ended sharply lower Thursday, paced by a slump in consumer discretionary stocks, and fresh weakness in tech after the sector failed to hold onto intraday gains for the second day in a row. 

They fell 1.1% while the Nasdaq dropped 0.9% (313 points), and 1.3% (the Nasdaq).

Amazon.com, Garmin (NYSE :), and VF Corporation were the leading consumer discretionary stock decliners. This was due to sentiment turning negative late in session on risk assets.  

Financials struggled to hold onto gains even as investors digested better-than-expected quarterly results from the sector, and bought the recent dip in bank stocks.

Travelers Companies (NYSE -) soared by more than 3% following the company’s explosive quarterly results. This was a result of premium gains and top and bottom line beats.

State Street (NYSE:), Bank of New York Mellon(NYSE:) — Both of these companies were in pressure after quarterly earnings fell short of Wall Street expectations – both of them gained over 1%.

M&T Bank (NYSE:) and Regional Financials, however, were in the red, after quarterly results missed analysts’ expectations.

In tech, investors continued to sell into strength as the sector pared gains to end the day in negative ahead of the start of quarterly results from big tech, with Netflix (NASDAQ:) set to report after closing bell.

Ahead of Netflix’s results, some on Wall Street have turned less constructive on the steaming media giant’s performance during the fiscal quarter, citing third-party data pointing to underwhelming subscriber additional in the quarter.

“As most Netflix data watchers have noticed, third party data that is used to gauge 4Q net adds has not been encouraging,” Deutsche Bank said in a note last week.

“Our analysis of Google (NASDAQ:) trends data leads us to lower our 4Q net add estimate to 7.25 million, as compared to guidance of 8.5 million,” it added.

Falling oil prices and data showing unexpectedly rising crude supply in the United States put pressure on energy stocks.

The economic outlook was mixed. Weekly unemployment claims rose as expected, although economists downplayed this upside surprise, citing omicron effects.

In the week ended Jan.15, initial jobless claims rose by 55,000 to 286,000, surpassing all expectations of a fall to 225,000.

“It is likely that business disruptions due to the spread of the Omicron variant of COVID had an impact on the data this week. We suspect that these disruptions will prove to be short-lived, but they will create some volatility in the next couple of weeks,” Jefferies said in a note.

Peloton Interactive (NASDAQ) is reporting that it plans to stop producing connected products temporarily due to declining demand. CNBC cited internal documents. The shares of the company fell by 24%.