Review & Preview: Space Race

By Nicholas Jasinski | Tuesday, July 20

Rebound. Investors shook off yesterday's declines and bought the dip today. That has been a winning strategy for the duration of the current bull market.

There are clouds on the horizon that can't be ignored, but the present remains bullish: lots of monetary stimulus and liquidity, confident consumers armed with savings and ready to release pent-up demand, blockbuster earnings growth, and a virus that's still under control, all things considered.

That's a tough backdrop to get meaningfully bearish against.

The Dow Jones Industrial Average jumped 1.6% today, following its worst loss of the year yesterday. The S&P 500 added 1.5% and the Nasdaq Composite gained 1.6%.

Value stocks that fell hardest yesterday were among the biggest winners today. S&P 500 industrials rose 2.8% and financials added 2.5%. But the rally was broad: All 11 sectors in the S&P 500 closed higher, as 451 of the index's stocks rose.

The latest crop of earnings reports got plenty of attention today. This morning featured results from companies including Halliburton, which hasn't participated in the surge in oil-related companies' stocks this year. Its shares had added about 3% year to date, versus roughly 50% for oil-and-gas producers as a group.

"Like producers, Halliburton is vulnerable to commodity-price slumps, but its problems go deeper, too," wrote Barron's Avi Salzman. "The era of 'drill baby drill' is over in the U.S., and that is particularly difficult for Halliburton, the leader in oilfield services for U.S. shale drilling."

But Halliburton did well in the second quarter, sending shares almost 4% higher today. And analysts are beginning to warm to the stock. Read more from Avi here.

After the bell today, Netflix reported subscriber growth of 1.5 million in the second quarter, to end June with just over 209 million total subscribers worldwide. But subscriber guidance was below expectations, wrote Eric Savitz, sending shares lower in after-hours trading.

"The company continues to absorb the huge user growth experienced during the pandemic," Eric wrote. Netflix added nearly 37 million subscribers last year, boosted by stay-at-home orders and the pandemic.

In other news, Netflix confirmed that it was dipping its toes in streaming video games, but that development of a future mobile-focused offering was in its early days.

There's more from Eric on Netflix's latest report here. And read more of Barron's earnings coverage today and all earnings season long here.

DJIA: +1.62% to 34,511.99
S&P 500: +1.52% to 4,323.06
Nasdaq: +1.57% to 14,498.88

The Hot Stock: HCA Healthcare +14.4%
The Biggest Loser: PPG Industries -4.4%

Best Sector: Industrials +2.8%
Worst Sector: Consumer Staples +0.1%