Netflix earnings and tech stocks boost S&P 500, Nasdaq to closing highs
Three main benchmarks achieve sixth straight weekly gain
Netflix jumps on growth forecast
CVS falls after replacing CEO
American Express, SLB down following results
Updates to close
By David French
Oct 18 (Reuters) - The S&P 500 andthe Nasdaq ended higher on Friday, boosted by an earnings-driven jump in Netflix shares and broader gains across technology stocks.
All three major Wall Street benchmarks comfortably secureda sixth straight weekly gain, with the Dow Jones Industrial Average closing largelyunchanged a day after posting a record closing high.
Shares of Netflix NFLX.O jumped after the streaming giant topped Wall Street estimates for subscriber additions and said it expected continued growth through the end of the year.
Many of the so-called Magnificent Seven techstocks, which have driven much of Wall Street's rally this year, rose.
Apple AAPL.O gained after data showed a sharp increase in new iPhone sales in China, while chip heavyweight Nvidia NVDA.O advanced afterBofA Global Research hiked its price target on the stock.
Netflix's increase lifted the communication services sector .SPLRCL, making it the largest gainer among the 11 S&P 500 sectors, while information technology .SPLRCT rose.
"It's kind of the 'what's not to like' market," said David Waddell, chief executive of Waddell & Associates, citing positive economic data, disinflation and upbeat earnings and forecasts from corporate America.
According to preliminary data, the S&P 500 .SPX gained 23.05 points, or 0.39%, to end at 5,864.52 points, while the Nasdaq Composite .IXIC gained 115.30 points, or 0.63%, to 18,488.91. The Dow Jones Industrial Average .DJI rose 37.96 points, or 0.09%, to 43,277.01.
The Dow was weighed down by American Express AXP.N, which lost ground afterthe credit card company's quarterly revenue missed estimates.
Financial companies have had a broadly positive earnings season so far. The S&P Banks index .SPXBK slipped slightly though, ending its string of wins at five.
The upbeat 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 the Nov. 5U.S. presidential election, could leave stocks vulnerable to a pullback.
David Waddell of Waddell & Associates noted though that strong corporate earnings could override any political considerations or concerns about overdone valuations.
"We have gotten all we're going to get from multiple expansion, so I think the path forward is completely reliant on earnings," he said. "We're priced for pretty-darn-good earnings, so it could create a disturbance if we don't get them, but absent of recession, I think the bull is intact."
Small-cap stocks have attracted investor buying in recent days, with both the Russell 2000 .RUT and S&P Small Cap 600 .SPCY outperforming major indexes for the week. Both the Russell 2000 and the S&P Small Cap 600 were down onFriday.
Energy .SPNY was the weakest of the S&P sectors, bogged down by lower oil prices and a decline in SLB SLB.N after it posted earnings below expectations. This dragged down fellow oilfield services providers Baker Hughes BKR.O and Halliburton HAL.N.
CVS Health CVS.N slumped after it replaced CEO Karen Lynch with company veteran David Joyner and withdrew its 2024 profit forecast.
The news also weighed on other health insurers, including CignaCI.N and Elevance Health ELV.N.
Meanwhile, U.S. listings of Chinese companies moved higher after China's central bank launched funding schemes aimed at boosting the equity market.
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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