Written by Lisa Pauline Matakkal and Purvi Agarwal
(Reuters) – The S&P 500 and the tech-heavy Nasdaq rose on Friday, helped by tech stocks, while Netflix soared after beating expectations for subscriber growth.
Netflix stock rose 10.2% to a record high after the streaming giant said it beat Wall Street expectations in subscriber growth and said it expects growth to continue through the end of the year.
The Dow Jones Industrial Average fell 3.6%, dragged down by American Express, which reported lower-than-expected quarterly sales.
Meanwhile, the so-called Magnificent Seven stocks that have driven much of Wall Street’s stock rally this year all rose.
Apple rose 1.2% after data showed a surge in new iPhone sales in China, and semiconductor giant Nvidia rose 0.6% after BofA Global Research raised its price target.
The communications services sector rose 1% and the information technology sector rose 0.4% on Netflix’s gains.
A strong start to the quarterly earnings season and generally positive economic data has the three major indexes on track for their sixth straight week of gains.
However, in addition to high expectations for corporate performance and potential volatility before and after the US presidential election in November, stock prices are likely to fall due to excessive valuations with the S&P 500 index trading at approximately 22 times expected P/E. There is a possibility that it will happen.
“We had good returns this morning from Netflix, good housing numbers, and overall sentiment is very good,” said Dustin Thackeray, chief investment officer at Crew Advisors.
“Right now it may be a bit of a waiting game to see how things go with the (upcoming US presidential election) and the Fed meeting in the days after, and whether there is any kind of pause in future meetings.” The rest of this year. ”
The Dow Jones Industrial Average fell 39.97 points, or 0.09%, to 43,199.96, the S&P 500 rose 15.92 points, or 0.27%, to 5,857.39, and the Nasdaq Composite Index rose 95.02 points, or 0.52%, to 18,468.63.
The small-cap Russell 2000, which rose 2% for the week and was on track to outperform the major indexes, ended the day down 0.1%.
CVS Health fell 9.3% after replacing Chief Executive Officer Karen Lynch with veteran David Joyner and withdrawing its 2024 profit forecast. It was the biggest decline in the benchmark index.
SLB fell 3.2% after the results, while Procter & Gamble rose 0.1%.
Meanwhile, the number of Chinese companies listed in the United States rose after the People’s Bank of China launched a financing program aimed at revitalizing the stock market. Alibaba rose 1.7% and Jingtocom rose 2.2%.
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According to CME’s FedWatch, around 90% of respondents expected the U.S. Federal Reserve to cut interest rates by 25 basis points at its November meeting.
In terms of economic indicators, single-family housing starts increased by a seasonally adjusted annual rate of 2.7% to 1.027 million units in September.
Advancing issues outnumbered declining issues on the New York Stock Exchange by a ratio of 1.41 to 1, and on the Nasdaq by a ratio of 1.32 to 1.
The S&P 500 index recorded 52-week highs for 42 stocks and new lows for 2 stocks, while the Nasdaq Composite Index recorded 109 new highs and 27 new lows.
(Reporting by Lisa Matakkal and Purvi Agarwal in Bengaluru; Editing by Pooja Desai)
