Indexes end mixed; Netflix plunges on subscriber losses
NEW YORK – Wall Street’s major stock indexes ended mixed Wednesday after another day of choppy trading, while Netflix lost more than a third of its value after reporting its first subscriber loss in more than a decade and predicting more grim times ahead.
The S&P 500 slipped 0.1% after a late-afternoon fade, while the Nasdaq fell 1.2%. The Dow Jones Industrial Average rose 0.7%, having received a bump from IBM, which added 7.1% after reporting quarterly results that beat analysts’ estimates.
Netflix slumped 35.1% a day after the streaming giant reported its first decline in subscribers in more than a decade. The company also said it expects a steeper decline during the current quarter. Netflix is now considering changes that it has long resisted, including minimizing password sharing and creating a low-cost subscription option supported by advertising. The stock is now down 67% from the all-time high it reached in November.
The skid in Netflix weighed heavily on the S&P 500, outweighing gains elsewhere in the benchmark index, and hit the communication services sector the hardest, pulling it 4.1% lower.
“While it is in communication services, it is also a discretionary stock, clearly, in that it’s one of those things people buy because they want, not because they have to,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab.
Technology stocks, retailers and other companies that rely on consumer spending also weighed on the market. Chipmaker Nvidia fell 3.2%, and Amazon dropped 2.6%.
Health care stocks made some of the biggest gains. CVS rose 2.7% and medical device maker Boston Scientific added 3%.
Banks and household product makers also bucked the market’s overall decline. JPMorgan Chase rose 0.4%, while Procter & Gamble rose 2.7% after beating analysts’ quarterly earnings forecasts.
Tesla rose 4% in after-hours trading after reporting first-quarter net earnings that were over seven times greater than a year earlier. Thecompany benefited from strong sales despite global supply chain kinks and pandemic-related production cuts in China.
All told, the S&P 500 slipped 2.76 points to 4,459.45, and the Nasdaq fell 166.59 points to 13,453.07. The Dow rose 249.59 points to 35,160.79.
Smaller company stocks held up better than the broader market. The Russell 2000 added 7.42 points, or 0.4%, to 2,038.19.
Investors continue focusing on the latest round of corporate earnings as they try to determine how companies are dealing with rising inflation and cost pressures. American Airlines and Union Pacific are due to report results today