Stocks shot higher out of the gate Wednesday, buoyed by a well-received earnings report from streaming giant Netflix (NFLX). Some strong economic data also helped boost equities.
At the close, the Dow Jones Industrial Average was down 0.3% at 37,806, while the Nasdaq Composite was up 0.4% at 15,481. The S&P 500 gained 0.1% to 4,868, its fourth straight record close.
Fueling upside in the main indexes was a positive reaction to Netflix's fourth-quarter results. The company reported year-over-year Q4 revenue growth of 12.5% to $8.8 billion, while earnings per share surged to $2.11 from last year's 12 cents. The top-line results came in higher than analysts were expecting, though the bottom-line figure fell short of estimates.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Despite the bottom-line miss, Netflix stock jumped 10.7% Wednesday thanks to its stellar subscriber numbers. Specifically, the company added 13.1 million new subscribers globally – its biggest fourth quarter ever for subscription growth – easily outpacing its forecast for roughly 8.8 million.
"We enter 2024 with good momentum," Netflix said in its earnings report. For the first quarter, the company forecasts revenue to 13% to $9.2 billion and earnings to be up 56% to $4.49 per share.
"We thought NFLX might tread water in the first half of 2024 with operating income margins set, paid sharing dwindling and ads scaling," says Wells Fargo analyst Steve Cahall. But the company's "fourth-quarter outperformance indicates there's a lot of growth and margin still ahead."
Meta tops $1 trillion in market value
Elsewhere, Meta Platforms (META) became the latest stock to top $1 trillion in market value. META shares surged 1.4% today, bringing its market cap to $1.004 trillion. Meta's fellow Magnificent 7 stocks Apple (AAPL, -0.4%), Nvidia (NVDA, +2.5%), Alphabet (GOOGL, +1.1%), Amazon.com (AMZN, +0.5%) and Microsoft (MSFT, +0.9%) – which briefly topped a $3 trillion market value today – are already members of the trillion-dollar club.
Today's upside for META stock comes after Raymond James analyst Josh Beck named it a "top pick," citing "a growing narrative around one of the most compelling generative artificial intelligence (AI) monetization themes across tech unfolding that could scale to $25 billion to $60 billion of incremental revenue."
January PMI data comes in strong
In economic news, S&P Global's flash manufacturing purchasing managers index (PMI) jumped to a 15-month high of 50.3 in January from December's 48.2. Readings above 50 indicate expansion activity.
The services PMI, which measures activity in the services sector, hit a seven-month high of 52.9 in January.
This morning's PMI data "exceeded forecasts, but tomorrow's gross domestic product (GDP) report and Friday's personal consumption and expenditures (PCE) inflation print are likely to be more impactful on investor sentiment," says José Torres, senior economist at Interactive Brokers. "However, against this backdrop, market participants are expecting the first Fed cut to arrive in May vs March, with robust data serving to extend the journey across the monetary policy bridge."
Related content
- Kiplinger's Earnings Calendar for This Week
- 10 Things You Must Know About Bull Markets
- Analysts' Top S&P 500 Dividend Stocks to Buy Now
-
Ten Cheapest Places to Live in TexasProperty Tax Looking for a cheap place to live in Texas? Look no further. These counties have the lowest property tax bills in the Lone Star State.
-
AI Is Missing the Wisdom of Older Adults: What It Means for YouAI will increasingly affect your healthcare and finances, but young workers are primarily designing the systems and getting most of the jobs.
-
Stock Market Today: Good Feelings and Solid Data Lift StocksResilience and de-escalation defined another generally positive day for financial markets.
-
Stock Market Today: Tesla Drags on Stocks Amid Musk-Trump FeudSentiment has soured between President Trump and his once-loyal ally, Tesla CEO Elon Musk.
-
Stock Market Today: Stocks Brush Off Weak Jobs DataThe yields on the 2-year and 10-year Treasury notes fell sharply after a pair of weak economic reports.
-
Stock Market Today: Rally Extends on Good-Enough ExpectationsFiscal policy still has markets' attention, but taxes rather than tariffs and deficits rather than inflation are participants' primary focus.
-
Stock Market Today: Markets Move With Fresh Trade War WindsThe new uncertainty is the same as the old uncertainty, which is fine with investors, traders and speculators.
-
AI vs the Stock Market: How Did Tech Stocks, Palantir and Albemarle Perform in May?AI is a new tool to help investors analyze data, but can it beat the stock market? Here's how a chatbot's stock picks fared in May.
-
Stock Market Today: Stocks Bounce as US-China Tensions EscalateStocks were volatile to end the week and the month amid concerns a trade truce between the U.S. and China is splintering.
-
Stock Market Today: Stocks Chop as Judges Block Then Reinstate TariffsThe Trump administration has asked for and received a stay in a case that seems headed for the Supreme Court.
