Wednesday 24th January 2018
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Wall Street was mixed, though trading near record highs, as a rally in shares of Netflix following better-than-expected earnings offset slides in shares of Johnson & Johnson Procter & Gamble as their results disappointed.
Shares of Netflix soared, up 9.4 percent as of 1.15pm trading in New York, after as its increase in subscribers in its latest quarter beat analysts’ forecasts.
“Netflix is pouring more and more money into making content, and it is directly translating into more subscribers,” BTIG analyst Richard Greenfield told Reyters. “They see a huge opportunity and they are moving as fast as they can to attack it.”
In 1.15pm trading in New York, the Dow Jones Industrial Average slipped 0.05 percent. However, the Nasdaq Composite Index gained 0.6 percent. In 1.01pm trading, the Standard & Poor’s 500 Index added 0.1 percent.
US Treasuries also rose, pushing yields on the 10-year note two basis points lower to 2.63 percent.
All three benchmark stock indexes, including the Dow, reached record highs earlier in the day.
“The earnings season is going phenomenally well, and the government shutdown on Friday was reversed yesterday, so we’ve got the government behind us for the next couple of weeks,” Phil Orlando, chief equity market strategist at Federated Investors, told Bloomberg.
“But the reason the stock market is up is very simply that investors are reflecting on the fact that earnings are much better than expected,” according to Orlando.
To be sure, not all earnings exceeded expectations, such as results of Johnson & Johnson and those of Procter & Gamble. As a result, the Dow moved lower as slides in shares of Johnson & Johnson and those of Procter & Gamble, recently down 4.1 percent and 3.3 percent respectively, outweighed gains in shares of Travelers and those of General Electric, recently up 4.8 percent and 3.8 percent respectively.
In Europe, the Stoxx 600 Index rose 0.2 percent. The UK’s FTSE 100 index also added 0.2 percent, while Germany’s DAX Index gained 0.7 percent.
France’s CAC40 Index fell 0.1 percent.
Meanwhile, shares of France’s Carrefour climbed after the world’s second-largest retailer said it will invest 2.8 billion euros (US$3.4 billion) in online shopping and formed a partnership with Tencent, a Chinese internet giant, as part of a plan to revamp its business.
Carrefour also plans to cut 2,400 jobs in France, it said in a statement.
“We must revamp our model, by simplifying our organisation, opening ourselves up to partnerships, improving our operational efficiency, investing in our growth formats, building an efficient omnichannel model and developing our fresh and organic products offer, notably under the Carrefour brand," Alexandre Bompard, Carrefour’s chief executive officer, said in the statement.
The stock closed with a 3.2 percent gain in Paris.
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