Market Snapshot
briefing.com
| Dow | 35160.79 | +249.59 | (0.71%) | | Nasdaq | 13453.06 | -166.59 | (-1.22%) | | SP 500 | 4459.44 | -2.76 | (-0.06%) | | 10-yr Note | +27/32 | 2.874 |
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| | NYSE | Adv 2063 | Dec 1150 | Vol 852.0 mln | | Nasdaq | Adv 2280 | Dec 2191 | Vol 4.5 bln |
Industry Watch
| Strong: Real Estate, Health Care, Consumer Staples, Utilities |
| | Weak: Communication Services, Consumer Discretionary, Information Technology |
Moving the Market
-- Netflix (NFLX) tanks 35% on disappointing subscriber news
-- Broader market holds up impressively well, including the defensive-oriented and value stocks
-- Better-than-expected earnings reports from other heavyweights
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Broader market fends off Netflix disappointment
20-Apr-22 16:15 ET
Dow +249.59 at 35160.79, Nasdaq -166.59 at 13453.06, S&P -2.76 at 4459.44
[BRIEFING.COM] The S&P 500 decreased 0.1% on Wednesday, as the market did a good job mitigating the huge earnings disappointment in Netflix (NFLX 226.19, -122.42, -35.1%). The Dow Jones Industrial Average (+0.7%) and Russell 2000 (+0.4%) outperformed in positive territory, while the Nasdaq Composite fell 1.2%.
Briefly, shares of Netflix tanked 35% after the company lost 200,000 global paid subscribers in the first quarter and projected it would lose another 2 million subscribers in the second quarter. Investors questioned Netflix's growth story and braced for similar disappointments in streaming competitors and other former high-flyers like Meta Platforms (FB 200.42, -16.89, -7.8%).
The S&P 500 communication services sector (-4.1%) dropped 4% amid weakness in NFLX and FB, followed by smaller declines in the consumer discretionary (-1.4%) and information technology (-0.1%) sectors. The Vanguard Mega Cap Growth ETF (MGK 222.21, -2.79) fell 1.2%.
The broader market, though, held up impressively well, evident by the gains in eight of the 11 S&P 500 sectors, the roughly 2-to-1 advantage for advancing issues over declining issues at the NYSE, and the 0.6% gain in the Invesco S&P 500 Equal Weight ETF (RSP 158.96, +1.01).
Granted, a closer look reveals a defensive bias with the real estate (+1.9%), consumer staples (+1.5%), health care (+1.3%), and utilities (+0.8%) sectors atop the sector standings. The Treasury market also saw some relief.
Procter & Gamble (PG 463.65, +4.24, +2.7%), Abbott Labs (ABT 122.64, +2.66, +2.2%), and Anthem (ANTM 529.84, +12.80, +2.5%) supported the consumer staples and health care sectors following their better-than-expected earnings reports. IBM (IBM 138.32, +9.17, +7.1%) jumped 7% after it, too, exceeded earnings expectations.
The defensive tilt might have also been attributed to a recognition that the S&P 500 remained below its 200-day moving average (4497), a reminder that economic activity is moderating as denoted in the April Beige Book, and reports indicating that NYC could soon up its COVID-19 alert level to medium risk.
In the Treasury market, the 2-yr yield decreased one basis point to 2.57%, and the 10-yr yield decreased seven basis points to 2.84%. The U.S. Dollar Index fell 0.6% to 100.31. WTI crude futures increased 0.3%, or $0.33, to $102.40/bbl.
Separately, the strength of the Dow Jones Transportation Average (+1.7%) was largely due to a 12% gain in its highest-priced component, Avis Budget (CAR 319.42, +34.07, +11.9%). CAR was upgraded to Equal Weight from Underweight at Barclays.
Reviewing Wednesday's economic data:
- Existing home sales decreased 2.7% month-over-month in March to a seasonally adjusted annual rate of 5.77 million (Briefing.com consensus 6.20 million) versus a downwardly revised 5.93 million (from 6.02 million) in February. Total sales in March were down 4.5% from a year ago.
- The key takeaway from the report is that the supply of available homes for sale remains extremely tight, yet higher mortgage rates and higher inflation are contributing to a slowdown in demand rooted in affordability pressures that are expected to persist.
- The weekly MBA Mortgage Applications Index decreased 5.0% following a 1.3% decline in the prior week.
Looking ahead, investors will receive weekly Initial and Continuing Claims, the Philadelphia Fed Index for April, and the Leading Economic Index for March on Thursday.
- Dow Jones Industrial Average -3.2% YTD
- S&P 500 -6.4% YTD
- Russell 2000 -9.2% YTD
- Nasdaq Composite -14.0% YTD
Crude futures settle slightly higher
20-Apr-22 15:30 ET
Dow +321.44 at 35232.64, Nasdaq -136.84 at 13482.81, S&P +5.19 at 4467.39
[BRIEFING.COM] The S&P 500 is up 0.1% as the broader market continues to stand its ground despite the Netflix (NFLX 222.60, -126.07, -36.2%) disappointment.
One last look at the sectors shows real estate (+2.1%), health care (+1.5%), and consumer staples (+1.6%) sectors up between 1-2%, while the communication services (-4.1%) and consumer discretionary (-1.1%) sectors trade sharply lower.
WTI crude futures settled higher by $0.33 (+0.3%) to $102.40/barrel.
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