Tuesday, April 19, 2022

A Netflix Stunner

 

By Jeffrey Cane|  Tuesday, April 19

Why Not?     Global economic growth looks weaker, according to the International Monetary Fund, yet U.S. earnings growth has so far been robust.  Government bond yields were higher, but two Federal Reserve officials played down the need for the Fed to be super-aggressive on interest rates.  And crude oil was lower. 

So with Wall Street's worry meter dialed down a notch or two, there was no reason not to buy stocks today. The market ended broadly higher, closing near its highest levels. 

The S&P 500 rose 1.6%, after two days of declines, for its best performance since March 16. All but one of its 11 sectors – energy – ended with gains. 

The Dow Jones Industrial Average closed up 1.45%, while the Nasdaq Composite surged 2.15%.   

Netflix could weigh on media stocks tomorrow after said it lost 200,000 net subscribers in its most recent quarter and expects to lose two million net subscribers in its current quarter. The stock was down nearly 26% in after-hours trading. More on that below. 

On the bright side, IBM rose in after-hours trading after reporting first-quarter results that were better than expected.

Travel-related stocks were strong performers today,  a day after a federal judge in Florida ruled that the public transit mask mandate was unlawful: American Airlines (up 5.7%), Uber Technologies (up 6.3%) Norwegian Cruise Line and Carnival (both up 4.6%), and Wynn Resorts (up 5.9%). 

Banks also did well.  Signature Bank led the S&P 500 with a 8.1% gain, while Citizens Financial Group was not far behind, rising 6.8%. Both had earnings beats.  JPMorgan Chase, whose results last week disappointed, ended 2.1% higher today. 

 Strong earnings helped lift Johnson & Johnson 3.1%.

"Aside from earnings, investors seem to be in dip-buying mode, which might have been the real driver of Tuesday’s market action," noted Jacob Sonenshine and Jack Denton on Barrons.com today

Treasury yields, meanwhile, continue to climb.  The yield on the benchmark 10-year note rose to 2.911% – its highest settlement since Dec. 13, 2018 – from 2.861%  yesterday. 

Crude oil futures slumped 5.22%, to $102.56 a barrel. Oil is now off 17% from its March 8 high of $123.70 a barrel.

Get tips for tackling your personal finance questions. Join MarketWatch's Mastering Your Money event tomorrow, when topics will include how to manage expenses in a time of high inflation, how to handle student loans with the repayment holiday ending, and how to invest amid volatility and uncertainty.

 

 


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