The San Juan Daily Star
Wall Street rallies to end higher on Alphabet, Netflix lift
U.S. stocks closed higher on Friday as the S&P 500 and Dow snapped three-session losing streaks and the Nasdaq rose more than 2% as quarterly earnings helped propel Netflix , while Google parent Alphabet later boarded. Announcement of job cuts.
Shares of Netflix Inc rose 8.46% after the streaming company added more subscribers than expected in the fourth quarter and said co-founder Reed Hastings is stepping down as chief executive.
Netflix’s quarterly report comes as the US Federal Reserve’s rising interest rate path and recession concerns hinder technology and other growth-related sectors, causing companies such as Microsoft Corp and Amazon.com Inc to lay off thousands of employees. Is.
Alphabet Inc was the most recent company to announce job cuts as it said it was cutting 12,000 jobs, sending shares 5.34% higher.
The gain sent the communications services index up 3.96% as the top performer among 11 major S&P 500 sectors, its biggest daily percentage gain since Nov. 30.
High-growth sectors such as communications services were among the worst performers in 2022 and were particularly vulnerable in the last few months of the year as investors turned to stocks with higher dividend yields.
“Today’s action is probably because we had three down days, so it got into a little bit oversold position and they’re getting a little bit of a bargain today,” said Ken Polkari, managing partner at Case Capital Advisors in Boca Raton. Florida.
“If people are seeing an opportunity, if they’re getting more comfortable with the Fed’s narrative … investors are starting to buy into that narrative and say ‘well, that’s it, let’s get those stocks. See who really got beaten up.” ‘ Because the market is a discounting mechanism.”
The Dow Jones Industrial Average rose 330.93 points, or 1%, to 33,375.49, the S&P 500 rose 73.76 points, or 1.89%, to 3,972.61 and the Nasdaq Composite rose 288.17 points, or 2.66%, to 11,140.43.
For the week, the Dow was down 2.7%, the S&P 500 down 0.66% and the Nasdaq down 0.55%.
The comments came largely from Federal Reserve officials who have said they expect interest rates to climb at least 5% this year as the central bank tries to tame high inflation. On Friday, Fed Governor Christopher Waller said the central bank may be “quite close” to the point where rates are “restrictive enough” to calm inflation, which gave an additional boost to equities.
The Fed is expected to raise rates by 25 basis points (bps) in its policy announcement on February 1.
Still, concerns about corporate earnings remain as the US economy continues to show signs of slowing and a possible recession.
Analysts now expect S&P 500 companies’ year-over-year earnings to decline 2.9% in the fourth quarter, after declining 1.6% at the start of the year, according to Refinitiv data.
However, gains on the Dow were capped by a 2.54% drop in shares of Goldman Sachs Group Inc after the Wall Street Journal reported that the Fed was investigating the company’s consumer business.
Volume on US exchanges stood at 11.90 billion shares compared to an average of 10.87 billion shares for the entire session in the last 20 trading days.
Advancing issues declined in the ratio of 3.55-to-1 on the NYSE; On the Nasdaq, the 2.63-to-1 ratio was in favor of advancers.