The Nasdaq rose on Wednesday after a positive forecast from Netflix added to a largely upbeat second-quarter earnings from U.S. companies against the backdrop of rising recession fears from the Federal Reserve’s efforts to tame surging inflation.
Netflix Inc’s shares gained 3% after the company predicted it would return to customer growth during the third quarter, while posting a smaller-than-forecast 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 0.3% and 2%.
“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.
“We’ve been selling the rumor. 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 0.3% ahead of its earnings report after market close.
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 10:00 a.m. ET, the Dow Jones Industrial Average was down 122.60 points, or 0.39%, at 31,704.45, while the S&P 500 was down 9.92 points, or 0.25%, at 3,926.77. The Nasdaq Composite was up 17.22 points, or 0.15%, at 11,730.37.
Trading remained volatile in thin volumes.
Merck & Co Inc dropped 0.9% 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 10.1% as the oilfield services provider reported a bigger second-quarter loss, while its adjusted profit also missed estimates.
Declining issues outnumbered advancers for a 1.19-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.65-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 29 new lows, while the Nasdaq recorded 17 new highs and 11 new lows.
Comments
Comments are closed.