Nasdaq boosted by growth stocks after Netflix’s upbeat forecast, jumps 1.8%
The Nasdaq gained nearly 2% on Wednesday after a positive forecast from Netflix added to largely upbeat second-quarter earnings from U.S. companies amid rising recession fears due to the Federal Reserve’s efforts to tame surging inflation.
Netflix Inc’s shares jumped 7.1% after the company predicted it would return to customer growth during the third quarter, while posting a smaller-than-expected 1 million drop in subscribers in the second quarter.
The forecast from the streaming service provider helped other high-growth stocks extend gains. Shares of Apple Inc , Amazon.com Inc, Microsoft Corp and Meta Platforms Inc added between 1.7% and 4.1%.
“Right now, investors seem more willing to reward than to punish because there’s already a lot of pessimism baked into trader sentiment,” said Steve Sosnick, chief strategist at Interactive Brokers.
“If companies can put out some decent results that could get people to be more willing to buy than to sell.” Electric-vehicle maker Tesla Inc slipped 1.4% ahead of its earnings report after market close.
The S&P 500 growth index gained 1.6%, while S&P 500 value stocks were flat.
Analysts expect aggregate year-on-year S&P 500 profit to grow 5.9% in this reporting season, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data.
Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed’s upcoming meeting next week, until some policymakers signaled a 75-basis-point increase.
At 12:20 p.m. ET the Dow Jones Industrial Average was up 94.42 points, or 0.30%, at 31,921.47, the S&P 500 was up 35.19 points, or 0.89%, at 3,971.88, and the Nasdaq Composite was up 218.41 points, or 1.86%, at 11,931.56.
Trading remained volatile in thin volumes, with the CBOE Volatility index last down 23.83 points to its lowest in nearly three months.
“Low volumes accentuate market moves historically and even though we’ve wiped off $10 or $15 trillion from global equities this year, there’s still a lot of excess liquidity. So low volume on excess liquidity can still accentuate moves,” John Lynch, chief investment officer for Comerica Wealth Management, said.
Merck & Co Inc’s shares fell 2.2% as the company’s cancer therapy Keytruda failed to meet the main goal of a late-stage trial testing it in patients with head and neck cancer.
Baker Hughes Co plunged 8.9% as the oilfield services provider reported a bigger second-quarter loss, while its adjusted profit also missed estimates.
Advancing issues outnumbered decliners for a 2.15-to-1 ratio on the NYSE and a 2.76-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 29 new lows, while the Nasdaq recorded 20 new highs and 18 new lows.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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