US stocks notched records and extended impressive streaks Friday as Netflix (NFLX) delivered powerful earnings and set the stage for Big Tech’s corporate results in the coming days.
The S&P 500 (^GSPC) added about 0.4% and recorded a fresh all-time high, as well as its sixth straight week of gains, the longest streak in 2024. The tech-heavy Nasdaq Composite (^IXIC) moved up 0.6%, leading gains. The Dow Jones Industrial Average (^DJI) rose 0.1% after hitting a new closing high the day before.
The major stock gauges logged weekly wins after a strong showing by big banks to kick off earnings season. The Dow grabbed the top of the weekly chart, adding 0.9%, followed by the S&P 500, which increased 0.8%, and the Nasdaq’s 0.7% gain.
Netflix’s results late Thursday relieved some worries that Big Tech names might struggle in the third quarter as they did in the last. The streaming giant’s profit surged to outstrip Wall Street estimates, while revenue and subscriber growth also came in stronger than expected. Its shares jumped around 11%.
In commodities, gold (GC=F) prices hit a record, topping $2,700 an ounce. Concerns about the Middle East conflict and uncertainty about the outcome of the US presidential election prompted a shift to less-risky assets.
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Stocks extend winning streak as the S&P and the Dow set records
US stocks notched records and extentend impressive streaks Friday as Netflix (NFLX) delivered powerful earnings and set the stage for Big Tech’s corporate results in the coming days.
The S&P 500 (^GSPC) added about 0.4% and recorded a fresh all-time high, as well as its sixth straight week of gains, the longest streak in 2024. The tech-heavy Nasdaq Composite (^IXIC) moved up 0.5%, leading gains. The Dow Jones Industrial Average (^DJI) rose 0.1% after hitting a new closing high the day before.
The major stock gauges logged weekly wins after a strong showing by big banks to kick off earnings season. The Dow grabbed the top of the weekly chart, adding 0.9%, followed by the S&P 500, which increased 0.8%, and the Nasdaq 0.7% gain.
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A look at the week ahead
With robust earnings from big banks and from the streaming giant Netflix (NFLX), the earnings season so far has powered the market higher. An array of big names is set to report next week, filling most of the economic calendar. Coca-Cola (KO), Boeing (BA), Tesla (TSLA) and Hilton (HLT) are among the major companies set to share their quarterly results.
Investors will also get a fresh look at consumer sentiment, which earlier this month showed a souring mood following prior gains in the past two months. After single-family housing starts ramped up last month as mortgage rates lowered, market observers will also get a glimpse of new home sales.
Investors don’t have another inflation reading on the docket, but the Fed will publish its Beige Book, a compilation of anecdotal evidence across the Fed’s 12 bank districts. Central bank officials will use the information on wage growth and pricing pressures when they meet for their next policy meeting in less than three weeks.
Yahoo Finance’s Brent Sanchez has a graphical breakdown of what to watch next week:
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Utilities outperform the broader markets as enthusiasm over AI electricity demand builds
The S&P 500 Utilities ETF (XLU) is up a whopping 29% so far this year — the best-performing sector to date, compared to the broader index’s 23% rise.
Much of the gains stem from enthusiasm over power producers that stand to benefit from the electrification boom — which includes Big Tech’s massive appetite for AI data centers and electric vehicles.
There’s no better example of that investor fever than the S&P 500’s top performer this year, power producer Vistra Corp (VST).
Shares of the Irving, Texas-based company are up 243% year to date, outperforming even AI heavyweight Nvidia (NVDA), up 186% during the same period.
Read more here.
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The case against economic re-acceleration
After a strong September jobs report, robust retail sales figures, and other recent economic data that came in stronger than expected, some market observers have pivoted from worrying about a potential recession to the possibility of a re-acceleration.
As Bank of America analysts wrote in a note on Friday, some investors worry that the Federal Reserve’s new easing policy could spark inflationary pressures to heat up again. Officials are trying so hard to prevent an economic slowdown, the thinking goes, that they have increased the risk of running the economy too hot.
But the Bank of America analysts make the case that such concerns are overdone. They point to the “steady, if somewhat slow, disinflation” trend over the last several quarters; and a Fed that appears ready to respond to any sign of a reignited price pressures.
“Fed commentary after the GDP and jobs data has been much less dovish, suggesting that policymakers are vigilant to upside risks,” said the report. “Should those risks start to materialize, we think the Fed will partially mitigate them by slowing or even ending the cutting cycle.”
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Tesla ‘Full Self-Driving’ autos face new investigation after fatal crash
The National Highway Traffic Safety Administration (NHTSA) dealt a potential setback to Tesla’s (TSLA) autonomous ambitions with a new investigation into the company’s full self-driving (FSD) technology.
NHTSA said it had opened an investigation into Tesla’s FSD software over reports of four crashes where FSD software was engaged in an “area of reduced roadway visibility conditions.” NHTSA said reduced roadway visibility was due to conditions like sun glare, fog, or airborne dust, reports Yahoo Finance’s Pras Subramanian.
Shares of the electric vehicle company were flat Friday afternoon.
NHTSA said in one incident a pedestrian was struck and killed and in another an injury occurred when FSD was engaged in reduced visibility conditions. NHTSA’s preliminary investigation would look into whether FSD’s controls could detect and respond to reduced roadway visibility conditions and if any other similar crashes occurred with FSD engaged, among other inquiries.
NHTSA said the investigation would cover 2.4 million Tesla EVs, which would be every vehicle with the ability to engage FSD in the US.
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Stocks trending in afternoon trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Friday:
American Express (AXP): Shares of the financial services company close to 3% Friday afternoon even after reporting better than expected third quarter profit and lifting its full year guidance on strong consumer spending. But investors still pulled back after revenue came in slightly lower than analyst forecasts and as investors pushed the stock to a record high during the prior session on Thursday.
Coinbase (COIN): The digital asset platform rose more than 5% Friday afternoon, continuing to ride the momentum of Bitcoin (BTC-USD)’s recent surge. The most popular and valuable cryptocurrency has risen close to 10% for the week, approaching the $70,000 level. Coinbase is set to report third quarter earnings at the end of the month.
Netflix (NFLX): Shares of the streaming platform rose more than 9% Friday following a strong third-quarter earnings report, exceeding analysts’ expectations on both revenue and profits, driven largely by an expansion in its advertising business.
CVS (CVS): The pharmacy chain fell more 6% Friday morning following news that the pharmacy chain will replace its CEO Karen Lynch with another company executive, David Joyner. CVS also said in a release Friday that it expects adjusted third-quarter earnings per share of $1.05 to $1.10, lower than the $1.70 forecast by Wall Street analysts, according to Bloomberg consensus estimates.
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Stocks rise in afternoon trading
Stock pointed upwards on Friday, as Netflix’s muscular quarterly report provided optimism ahead of the next major wave of mega-cap earnings.
The tech-heavy Nasdaq Composite (^IXIC) moved up roughly 0.5%, while the S&P 500 (^GSPC) added about 0.3%. The Dow Jones Industrial Average (^DJI) rose just above the flatline after hitting a fresh record closing high.
All three gauges are set to post wins for the week, with the Nasdaq and the S&P up about 0.7%, and the Dow leading the way with an anticipated 0.9% gain.
In commodities, gold (GC=F) prices hit a new record, topping $2,700 an ounce for the first time. Concerns about a widening Middle East conflict and uncertainty about the outcome of the US presidential election prompted a shift to less-risky assets.
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Apple stock rises after report shows China iPhone sales increasing 20%
Apple stock jumped as much as 1.7% following an industry report showing a surge in China iPhone sales.
Wedbush analyst Dan Ives said in a note to investors Friday, citing data from Counterpoint Technology Market Research, that China iPhone sales rose 20% since Sept. 20 — when Apple launched its iPhone 16 and its Chinese rival Huawei released a new smartphone model. Apple’s strong sales were led by its iPhone 15 models in particular, with sales of those phones jumping 44% year over year.
“This industry analysis is consistent with our recent Asia trip and supply chain checks that we believe China sales for iPhone 16 will show a strong rebound over the next year with the beginning of this AI driven super cycle led by iPhone 16,” said Ives. “We believe 20% of the world’s population will ultimately access AI through an Apple device over the coming years.”
Apple iPhone sales in China have fallen behind Chinese rival Huawei this year. And analysts have voiced concerns that its initial iPhone 16 sales were weak, though recent data has eased those fears.
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Netflix stock surges after subscriber growth beats estimates
Netflix (NFLX) stock climbed more than 10% Friday after the streaming giant beat third quarter EPS and revenue estimates and projected sales for the current quarter that came in ahead of Wall Street’s expectations.
The growth came as the streamer continued to lean on revenue initiatives like its crackdown on password sharing and ad-supported tier, in addition to last year’s price hikes on certain subscription plans, reports Yahoo Finance’s Allie Canal.
Subscribers also came in strong with another 5 million-plus subscribers added on the heels of breakout programming like “The Perfect Couple” and “Nobody Wants This.”
Subscriber additions of 5.07 million beat expectations of 4.5 million and follows the 8.05 million net additions the streamer added in the second quarter. The company had added 8.8 million paying users in Q3 2023.
Investors have praised the company’s foray into sports and live events. Meanwhile, its ad tier continues to gain traction, accounting for over 50% of sign-ups in the countries where it’s offered during the third quarter.
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Single-family housing starts ramped up in September as mortgage rates fall
Single-family housing starts gained in September from the previous month amid lower mortgage rates.
The measure rose 2.7% to a seasonally adjusted annual pace of 1.027 million units, the strongest pace in five months, according to new data from the Census Bureau.
The increase came as mortgage rates slid steadily last month, pushing the average 30-year fixed loan to its lowest level since early February 2023. The Fed cut its benchmark rate by half a percentage point in September.
Lower rates likely encouraged builders to file more building permits during the month. Contract permits for single-family dwellings rose to a pace of 970,000, a 0.3% gain from August’s revised figure of 967,000 units.
October’s data could reveal a different story, given that mortgage rates have ticked back up.
“While single-family home building increased in September, higher mortgage interest rates in October are likely to place a damper on growth in next month’s data,” NAHB’s chief economist Robert Dietz wrote in a note after the release.
Overall, housing starts eased in September, pressured by a drop in multifamily construction. Housing starts slipped 0.5% from the previous month to a seasonally adjusted annual pace of 1.354 million units.
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Stocks trending in morning trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday:
Netflix (NFLX): Shares of the streaming platform rose more than 10% Friday following a strong third quarter earnings report, exceeding analysts’ expectations on both revenue and profits, driven largely by an expansion in its advertising business.
CVS (CVS): The pharmacy chain fell more 8% Friday morning following news that it will replace its CEO Karen Lynch with another company executive, David Joyner. CVS also said in a release Friday that it expects adjusted third quarter earnings per share of $1.05 to $1.10, lower than the $1.70 forecast by Wall Street analysts, according to Bloomberg consensus estimates.
Apple (AAPL): The tech giant rose 1% on news of healthy sales in China, which grew by 20% in the first three weeks of the iPhone 16 going on the market, according to Counterpoint Research data.
Moderna (MRNA): Shares of the pharmaceutical company fell more than 1% following reports that rival GlaxoSmithKline (GLAXO.NS) is suing for US patent infringement over COVID vaccines.
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CVS stock plunges as chain replaces CEO Karen Lynch
CVS (CVS) stock fell more than 6% following news that the pharmacy chain will replace its CEO Karen Lynch with another company executive, David Joyner.
Shares are down nearly 20% this year as the company has been under pressure from Glenview Capital Management, a hedge fund pushing for changes, according to the Wall Street Journal, which first reported the news of Joyner’s appointment. CVS has been reportedly reviewing strategic options that could include a breakup.
David Joyner, the EVP of CVS Health and president of the chain’s pharmacy health services business, CVS Caremark, replaced Lynch as of Thursday, CVS said. Lynch had been CEO since 2021. In an interview with the Journal, Joyner said the company would move forward intact.
CVS said in a release Friday that it expects adjusted third quarter earnings per share of $1.05 to $1.10, lower than the $1.70 forecast by Wall Street analysts, according to Bloomberg consensus estimates. CVS said investors should no longer rely on its previous full-year 2024 earnings guidance — which it has already repeatedly lowered — given “continued elevated medical cost pressures in the Health Care Benefits segment.”
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Stocks rise after strong Netlfix earnings
The final trading session of the week started with mostly positive results as investors welcomed Netflix’s (NFLX) across-the-board earnings beat, which could serve as a preview for the megacap tech giants reporting next week.
The tech-heavy Nasdaq Composite (^IXIC) moved up roughly 0.5%, while the S&P 500 (^GSPC) added 0.3%. The Dow Jones Industrial Average (^DJI) fell about 0.1% after hitting a fresh record closing high.
The major stock gauges are all on track for a sixth consecutive weekly win after a strong showing by big banks to kick off earnings season.
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Good morning. Here’s what’s happening today.
