Amazon apologizes for Netflix outage
If ‘fiscal cliff’ cleared, S&P 500 could see record returns, financial analysts say
SAN FRANCISCO — Amazon .com apologized for a Dec. 24 disruption in its cloudcomputing services that hindered Netflix customers from watching movies, and said it is taking steps to prevent a recurrence.
Netflix said many users in the Americas were unable to access online content on Christmas Eve because of an outage caused by Amazon’s Web storage and computing system. Amazon didn’t identify Netflix in its statement.
“We want to apologize,” Seattle-based Amazon said. “We know how critical our services are to our customers’ businesses, and we know this disruption came at an inopportune time.”
The disruption began at 12:24 p.m. Seattle time on Dec. 24 and continued until the following day, according to Amazon. The problem was related to Amazon’s Elastic Load Balancing service, which apportions demand for computing power. NEW YORK — It might be a big if, but assuming Washington lawmakers can get past the “fiscal cliff,” many analysts say that the outlook for stocks in 2013 is good, as a recovering housing market and an improving jobs outlook helps the economy maintain a slow, but steady recovery.
Reasonable returns in 2013 would send the S&P 500 toward, and possibly past, its record close of 1,565 reached in October 2007.
A mid-year rally in 2012 pushed stocks to their highest in more than four years. Both the Standard & Poor’s 500 and the Dow Jones industrial average are on track for strong gains in 2012. Those advances came despite uncertainty about the outcome of the presidential election and bouts of turmoil from Europe, where policymakers finally appear to be getting a grip on the region’s debt crisis.
“As you remove little bits of uncertainty, investors can then once again return to focusing on the fundamentals,” said Joseph Tanious, a global market strategist at J.P. Morgan Funds. “Corporate America is actually doing quite well.”
Although earnings growth of S&P 500 listed companies dipped as low as 0.8 percent in the summer, analysts are predicting that it will rebound to average 9.5 percent for 2013, according to data from S&P Capital IQ. Companies have also been hoarding cash. The amount of cash and cashequivalents being held by companies listed in the S&P 500 climbed to an all-time high $1 trillion at the end of September, 65 percent more than five years ago, according to S&P Dow Jones Indices.
Assuming a budget deal is reached in a reasonable amount of time, investors will be more comfortable owning stocks in 2013, allowing valuations to rise, says Tanious.
Stocks in the S&P 500 index are trading on a price-to-earnings multiple of about 13.5, compared with the average of 17.9 since 1988, according to S&P Capital IQ data. The ratio rises when investors are willing to pay more for a stock’s future earnings potential.
The stock market will also likely face less drag from the European debt crisis in 2013, said Steven Bulko, the chief investment officer at Lombard Odier Investment Managers. While policymakers in Europe