Written by Shashwat Chauhan and Shristi Achar A
(Reuters) – The Dow and S&P 500 edged higher on Friday after strong results from American Express eased initial fears of escalating conflict in the Middle East, but Netflix rose after giving a lackluster outlook. This weighed on the Nasdaq.
Netflix fell 6.6% after the streaming video pioneer's lackluster second-quarter outlook.
Richard Hunter, head of markets at online investment platform Interactive Investors, said: “[Netflix]also pointed out that it plans to stop reporting subscriber numbers starting next year, which is likely due to the current customer growth rate. “It was taken as a sign that we may have reached a peak.”
“In order to maintain high standards of evaluation, attention is focused on the quarterly report season and high expectations are placed on the companies that submit their reports.”
American Express rose 3.2% after the credit card lender's first-quarter profit beat Wall Street expectations, cushioning Dow blue chips.
Meanwhile, explosions rang out in Iranian cities on Friday, with intelligence sources saying it was an Israeli attack, but Tehran downplayed the incident and suggested it had no plans to retaliate. This response appears to have been aimed at avoiding war in the entire region.
Stock markets have been rattled this week as investors readjust their expectations for how much the Fed will cut interest rates this year, with the S&P 500 and blue-chip Dow both down for the third straight week, and the Nasdaq for the fourth straight week. It is expected to decline. Losses if current trends hold.
Fed policymakers are united in their belief that borrowing costs will remain where they are, likely well into this year, given the slow and bumpy evolution of inflation and the continued strength of the U.S. economy.
Money markets are currently pricing in about 39 basis points (bps) of central bank interest rate cuts this year, down from about 150 basis points (bps) at the beginning of 2024, according to LSEG data.
U.S. stocks suffered $4.1 billion in outflows in the past week, the biggest two-week outflow since December 2022, according to Bank of America's weekly Flow Show report.
The CBOE Volatility Index, also known as Wall Street's “fear gauge,” last rose 0.30 points to 18.30 after topping the psychologically important level of 20 early in the session.
As of 9:55 a.m. ET, the Dow Jones Industrial Average was up 182.74 points, or 0.48%, at 37,958.12, the S&P 500 was up 2.50 points, or 0.05%, at 5,013.62, and the Nasdaq Composite Index was up 54.49 points, or 0.35 points. ) fell. %, 15,547.01.
Seven of the S&P 500's 11 sectors rose, with energy stocks leading the gains with a 1.1% gain, while communications services led the decline with a 1.0% decline.
Paramount Global shares rose 9.9% after people familiar with the matter told Reuters that Sony Pictures Entertainment and Apollo Global Management were in talks about making a joint bid for the company.
Procter & Gamble fell 1.9% after the consumer goods giant missed third-quarter net sales estimates.
Advancing issues outnumbered declining issues on the New York Stock Exchange by a 3.42-to-1 margin and 1.71-to-1 on the Nasdaq.
The S&P index posted two new 52-week highs and four new lows, while the Nasdaq posted nine new highs and 90 new lows.
(Reporting by Shashwat Chauhan and Shristi Achar A in Bengaluru; Editing by Sherry Jacob Phillips and Maju Samuel)
