Tech stocks lift Nasdaq, S&P 500; Netflix soars

NEW YORK: The S&P 500 and the tech-heavy Nasdaq gained ground on Friday, bolstered by technology stocks, while...
19 Oct, 2024

NEW YORK: The S&P 500 and the tech-heavy Nasdaq gained ground on Friday, bolstered by technology stocks, while Netflix surged after exceeding subscriber growth estimates.

Shares of Netflix jumped 10.2% to a record high after the streaming giant topped Wall Street estimates for subscriber additions and said it expected continued growth through the end of the year.

The Dow was dragged lower by American Express, which lost 3.6% after its quarterly revenue missed estimates.

Meanwhile, all the so-called Magnificent Seven stocks, which have driven much of Wall Street’s rally this year, rose.

Apple gained 1.2% after data showed a sharp increase in new iPhone sales in China, while chip heavyweight Nvidia added 0.6% after BofA Global Research hiked its price target on the stock.

Netflix’s gains lifted the Communication Services sector 1%, while Information Technology rose 0.4%.

An upbeat start to the quarterly earnings season and broadly positive economic data have put the three main indexes on track to log their sixth straight week of gains.

However, stretched valuations - the S&P 500 is trading at nearly 22 times forward earnings - along with high expectations for corporate results and potential volatility around November’s US presidential elections, could leave stocks vulnerable to a pullback.

“We had good earnings out of Netflix this morning, some good housing data and sentiment in general has been quite well,” said Dustin Thackeray, chief investment officer, Crewe Advisors.

“Now is maybe a bit of a waiting game to see how things shake out with (the upcoming US election) and then the subsequent Fed meeting a couple days later, to see if there is any sort of a pause in the coming meetings through the remainder of the year.”

The Dow Jones Industrial Average .DJI fell 39.97 points, or 0.09%, to 43,199.96, the S&P 500 .SPX gained 15.92 points, or 0.27%, to 5,857.39, and the Nasdaq Composite .IXIC gained 95.02 points, or 0.52%, to 18,468.63.

The small-cap Russell 2000 .RUT was set to outperform major indexes in the week with a 2% weekly gain, although it edged down 0.1% on the day.

CVS Health slumped 9.3% after it replaced CEO Karen Lynch with company veteran David Joyner and withdrew its 2024 profit forecast. It was the biggest decliner on the benchmark index.

Meanwhile, US listings of Chinese companies moved higher after China’s central bank launched funding schemes aimed at boosting the equity market. Alibaba gained 1.7% and JD.com rose 2.2%.

Expectations for the US Federal Reserve to ease interest rates by 25 basis points at its November meeting stood intact, at about 90%, according to CME’s FedWatch.

In economic data, single-family housing starts increased 2.7% to a seasonally adjusted annual rate of 1.027 million units in September.

Advancing issues outnumbered decliners by a 1.41-to-1 ratio on the NYSE, and by a 1.32-to-1 ratio on the Nasdaq.

The S&P 500 posted 42 new 52-week highs and two new lows, while the Nasdaq Composite recorded 109 new highs and 27 new lows.

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