Netflix and tech stocks climb, but Wall Street ends with indexes mixed
Wall Street was mixed Wednesday after strong gains for Netflix and some influential technology stocks helped offset losses across much of the U.S. stock market.
The Standard & Poor’s 500 added 3.95 points, or 0.1%, to 4,868.55 and set a record for a fourth straight day. The strength for tech stocks had the Nasdaq composite leading the market with a gain of 55.97 points, or 0.4%, to 15,481.92. The Dow Jones industrial average fell 99.06 points, or 0.3%, to 37,806.39.
Earlier in the day, stocks climbed elsewhere around the world after Chinese authorities announced measures to boost what’s been a disappointingly weak recovery for the world’s second-largest economy. Hong Kong’s Hang Seng index jumped 3.6% to trim its loss for the month to date to less than 7%.
On Wall Street, Netflix leaped 10.7% after it said it added many more subscribers during the last three months of 2023 than analysts expected. That took precedence for investors over the company’s profit, which fell short of analysts’ forecasts.
Also helping to bolster tech stocks was ASML, the Dutch company that’s a major supplier to the semiconductor industry. It reported stronger profit and revenue than analysts expected, and its U.S.-listed stock jumped 8.9%.
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Microsoft climbed 0.9% amid a furor around artificial intelligence technology that has vaulted it and other Big Tech stocks higher. Because it’s one of the largest stocks on Wall Street, its movements carry more weight on the S&P 500 and other indexes than smaller stocks.
It helped overshadow drops for the majority of stocks within the S&P 500, including a 3% fall for AT&T, following earnings reports that fell short of expectations.
Stocks have broadly rocketed to records recently on hopes that cooling inflation will convince the Federal Reserve to cut interest rates several times this year. Treasury yields have already come down considerably on such expectations, which can relax the pressure on the economy and financial system.
The only question on Wall Street is when the Fed will begin cutting rates and how deeply it will go. Traders have recently been trimming their bets after stronger-than-expected reports on the economy, which keep worries about a recession at bay but could also add upward pressure on inflation.
The latest signal of economic strength arrived Wednesday morning, when a preliminary report suggested growth in output for businesses accelerated to a seven-month high. Perhaps more important for Fed officials, the flash report from S&P Global also said that prices charged by businesses rose at the slowest rate since May 2020.
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The report did include some negative signals, such as delays in deliveries of supplies because of bad weather, “but for now the survey sent a clear and welcome message of resilient economic growth and sharply waning inflation,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
Treasury yields in the bond market erased earlier losses after the report. The yield on the 10-year Treasury rose to 4.17% from 4.14% late Tuesday. The two-year Treasury yield, which moves more on expectations for the Fed, held at 4.38% after dropping as low as 4.26% shortly before the report.
Economic reports coming later in the week could further sway expectations for rate cuts this year. On Thursday, the government will give its first estimate for how quickly the economy grew during the end of 2023. A day later, it will give the latest monthly update on the measure of inflation that the Federal Reserve prefers to use.
Virtually no one expects the Fed to cut rates at its meeting next week, but traders are still betting on a nearly 42% probability that it will move in March, according to data from CME Group.
Until then, earnings reports from companies may cause some of the biggest moves in the market.
Textron jumped 7.8% after the conglomerate behind Bell helicopters and Cessna jets reported profit for the latest quarter that was stronger than analysts expected.
On the losing end was Kimberly-Clark, which fell 5.5% after the maker of Huggies and Kleenex reported weaker profit and revenue than expected. DuPont tumbled 14% after it gave forecasts for upcoming revenue and profit that fell short of analysts’ estimates. It said it’s continuing to see weak demand form China, among other challenges.
China’s stock market has been one of the world’s worst recently on worries about its economy, which has raised pressure on Chinese authorities to make moves to stimulate the economy. Stocks climbed 1.8% in Shanghai following China’s move to free up cash held by banks. They’re still down 5.2% for the year so far.
Stocks also rose across much of Europe but dipped in Tokyo.
AP writers Elaine Kurtenbach and Matt Ott contributed to this report.
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