S&P 500, Nasdaq buoyed by tech stocks; Netflix soars after results
Netflix projects continued growth through year-end
CVS falls after replacing CEO
American Express, SLB down following results
Indexes up: Dow 0.04%, S&P 500 0.41%, Nasdaq 0.69%
Updated to 2:06 p.m. ET/1806 GMT
By David French and Lisa Pauline Mattackal
Oct 18 (Reuters) - The S&P 500 and the Nasdaq climbed on Friday, boosted by an earnings-driven jump in Netflix shares and broader gains across technology stocks.
All three major Wall Street benchmarks were comfortably on course to secure a sixth straight weekly gain, with the Dow Jones Industrial Average largely unchanged a day after posting a record closing high.
Shares of Netflix NFLX.O jumped 10.5% to a record high after the streaming giant topped Wall Street estimates for subscriber additions and said it expected continued growth through the end of the year.
All theso-called Magnificent Seven stocks, which have driven much of Wall Street's rally this year, rose.
Apple AAPL.O gained 1.5% after data showed a sharp increase in new iPhone sales in China, while chip heavyweight Nvidia NVDA.O added 1% after BofA Global Research hiked its price target on the stock.
Netflix's increase liftedthe communication services sector .SPLRCL 1%, making it the largest gainer among the 11 S&P 500 sectors, while information technology .SPLRCT rose 0.5%.
"We had good earnings out of Netflix this morning, some good housing data and sentiment in general has been quite well," said Dustin Thackeray, chief investment officer at Crewe Advisors.
At 2:06 p.m. Eastern time, the S&P 500 .SPX rose 23.93 points, or 0.41%, to 5,865.40 points, while the Nasdaq Composite .IXIC gained 126.02 points, or 0.69%, at 18,499.63. The Dow Jones Industrial Average .DJI edged up 18.77 points, or 0.04%, to 43,257.82.
The Dow was weighed down by American Express AXP.N, which lost 3% after the credit card company'squarterly revenue missed estimates.
Financial companies have had a broadly positive earnings season so far. The S&P Banks index .SPXBK was flat, having advanced in the five previous sessions.
Theseupbeat earnings of financial companies, and broadly positive economic data, have helped sustain the three main indexes' grind upwards in recent days.
However, stretched valuations - the S&P 500 is trading at nearly 22 times forward earnings - along with high expectations for corporate results and potential volatility around November's U.S. presidential election, could leave stocks vulnerable to a pullback.
"Now is maybe a bit of a waiting game to see how things shake out with (the upcoming U.S. election) and then the subsequent Fed meeting a couple days later, to see if there is any sort of a pause in the coming meetings through the remainder of the year," said Crewe Advisors' Thackeray.
Small-cap stocks have attracted investor buying in recent days, with both the Russell 2000 .RUT and S&P Small Cap 600 .SPCY set to outperform major indexes for the week. Both the Russell 2000 and the S&P Small Cap 600 were down marginally on Friday.
Energy .SPNY was the only weakerS&P sector, bogged down by lower oil prices and a 3.9% decline inSLB SLB.N after it posted earnings below expectations. This dragged down fellow oilfield services providers Baker Hughes BKR.O and Halliburton HAL.N, which slipped 1.4% and 2.2%, respectively.
CVS Health CVS.N slumped 6.1% after it replaced CEO Karen Lynch with company veteran David Joyner and withdrew its 2024 profit forecast. It was the biggest decliner on the S&P 500.
The news also weighed on other health insurers, with Cigna <CI.N>, Elevance Health<ELV.N>, and Humana<HUM.N> down between 1.1% and 3.2%.
Meanwhile, U.S. listings of Chinese companies moved higher after China's central bank launched funding schemes aimed at boosting the equity market. Alibaba BABA.N gained 2.3% and JD.com JD.O rose 2.9%.
In economic data, single-family housing starts increased 2.7% to a seasonally adjusted annual rate of 1.027 million units in September.
Netflix returned more to shareholders in 20 years https://reut.rs/3YsYfzS
Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru and David French in New York; Editing by Pooja Desai and Richard Chang
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