Nasdaq rises on positive earnings signals as inflation worries loom

  • Netflix wins on customer growth forecast
  • Baker Hughes hits biggest quarterly loss
  • Tesla to report earnings after market close
  • Dow down 0.12%, S&P 500 up 0.39%, Nasdaq up 1.24%

July 20 (Reuters) – The tech-heavy Nasdaq soared more than 1% on Wednesday as investors equate the latest earnings with positive signals from the economy, despite growing worries about inflation and a tightening in inflation. the Fed.

The S&P 500 edged up 0.39% while the Dow Jones Industrial Average slipped 0.12%.

Shares of Netflix Inc (NFLX.O) jumped 6% after the company predicted it would return to customer growth in the third quarter, while posting a lower-than-expected subscriber decline of 1 million in the second quarter. Read more

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Other high-growth stocks extended gains following the streaming service provider’s forecast. Shares of Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O), Microsoft Corp (MSFT.O) and Meta Platforms Inc (META.O) rose between 1% and 3.6%.

The S&P 500 technology sector index (.SPLRCT) rose 1.3%.

“Inflation remains a very important consideration in the minds of investors… what we are seeing today are positive earnings announcements allowing investors to hang their hats on positive news which should be a better omen for the remainder of the third quarter and 2022,” said Greg Bassuk, managing director at AXS Investments in Port Chester, New York.

“For Tesla, and Netflix and some of these flagship companies…investors are looking for messages about the outlook these companies have on the 2022 balance sheet.”

Electric vehicle maker Tesla Inc (TSLA.O) added 0.6% ahead of its earnings report after the market close.

Analysts expect overall S&P 500 year-over-year earnings to rise 5.9% this reporting season, down from the 6.8% estimate in start of the quarter, according to data from Refinitiv.

Soaring inflation initially led markets to price a full 100bp interest rate hike at the Fed’s next meeting next week, until some policymakers signaled a 75bp hike basic.

As of 1:45 p.m. ET, the Dow Jones Industrial Average (.DJI) fell 37.45 points, or 0.12%, to 31,789.6, the S&P 500 (.SPX) gained 15.19 points, or 0.39%, to 3,951.88 and the Nasdaq Composite (.IXIC) added 145.44 points, or 1.24%, to 11,858.59.

Trading remained volatile in low volumes, with the CBOE Volatility Index (.VIX) shedding 24.05 points to its lowest in over a month.

“Historically, low volumes accentuate market movements and even though we have erased $10 trillion or $15 trillion from global equities this year, there is still plenty of excess liquidity. Thus, a small volume of excess liquidity can further accentuate movements,” John Lynch, Chief Investment Officer. Comerica Wealth Management officer, said.

Health insurer Elevance Health Inc plunged 9% as the S&P’s biggest percentage loser as the company’s medical costs did not decline at the same rate as rival UnitedHealth Group Inc.

Baker Hughes Co fell 7.8% as the oil services provider reported a bigger second-quarter loss, while its adjusted profit also missed estimates. Read more

Advancing issues outnumbered declining ones on the NYSE by a ratio of 1.55 to 1; on the Nasdaq, a ratio of 2.09 to 1 favored advancers.

The S&P 500 posted a new 52-week high and 29 new lows; the Nasdaq Composite recorded 24 new highs and 24 new lows.

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Reporting by Echo Wang in New York and Shreyashi Sanyal in Bangalore; Additional reporting by Aniruddha Ghosh in Bengaluru; Editing by Sriraj Kalluvila, Shounak Dasgupta and Lisa Shumaker

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