Monday, May 20, 2024

US stocks open lower again; Netflix slumps on weak growth

by Associated Press

Stocks are opening lower on Wall Street again, continuing a weak spell that pulled major indexes lower over the previous two days. The S&P 500 slipped 0.1% in the first few minutes of trading Wednesday, and the tech-heavy Nasdaq gave back 0.4%. Netflix led a decline in communications sector stocks with a drop of 7%. The video streaming pioneer disappointed investors with its latest report on subscriber additions, which came in below its own forecasts. The gangbuster growth Netflix had seen during the pandemic appeared to be slowing as people start leaving their homes more and as competition from rival services picks up.

 Shares rose Wednesday in Europe and U.S. futures edged higher as corporate earnings took the spotlight after a day of declines in Asia.

Germany’s DAX gained 0.4% to 15,189.03 and the CAC 40 in Paris jumped 0.7% to 6,206.80. Britain’s FTSE 100 added 0.7% to 6,905.16. Wall Street looked set for a tepid start, with the future for the S&P 500 up less than 0.1% and that for the Dow industrials up 0.1%.

Worsening coronavirus outbreaks in Asia have cast a shadow over prospects for a regional recovery.

But investors also are focusing on a stream of company earnings reports, looking to see if Corporate America is recovering with the rest of the economy. This week roughly 80 members of the S&P 500 are due to report results, as well as one out of every three members of the Dow.

On average, analysts expect quarterly profits across the S&P 500 to climb 24% from a year earlier, according to FactSet.

Asian governments are scrambling to secure supplies of COVID-19 vaccines after seeing infection numbers surge in recent weeks. The rising caseloads are straining medical systems from Japan to India and leading to a restoration of pandemic precautions such as travel restrictions, quarantine requirements and a dimming of nightlife.

The Nikkei 225 in Tokyo gave up just over 2.0% to 28,508.55 while Hong Kong’s Hang Seng declined 1.8% to 28,621.92. In Seoul, the Kospi lost 1.5% to 3,171.66, while Sydney’s S&P/ASX 200 shed 0.3% to 6,997.50. The Shanghai Composite index ended flat at 3,472.93.

Worsening outbreaks in India and Thailand have also cast a pall on a recovery in travel, which in turn is clouding the outlook for oil and fuel prices, Stephen Innes of Axi said in a commentary

On Wednesday the S&P 500 closed at 4,134.94. The Dow Jones Industrial Average lost 0.8% to 33,821.30. After shedding an early gain, the technology-heavy Nasdaq slid 0.9%, to 13,786.27.

The Russell 2000 index of smaller company stocks, which has been outpacing the broader market all year, shed 2% to 2,188.21.

The yield on the 10-year Treasury fell to 1.57% from 1.60%.

Investors have turned defensive, favoring utilities, real estate stocks and a mix of companies that make consumer staples like food and household products.

The market has been swaying between gains and record highs to pullbacks as investors weigh solid economic growth against the risks still posed by the pandemic. That push and pull will likely continue as vaccine distribution rolls on and various industries reopen.

“In the near term, speculative momentum has waned with U.S. earnings season starting to look like a buy the rumor, sell the fact scenario,” Jeffrey Halley of Oanda said in a report.

In other trading, benchmark U.S. crude oil lost 27 cents to $62.40 per barrel in electronic trading on the New York Mercantile Exchange. It gave up 76 cents to $62.67 per barrel on Tuesday. Brent crude, the international standard, declined 25 cents to $66.32 per barrel.

The U.S. dollar rose to 108.22 Japanese yen from 108.09 yen late Tuesday. The euro fell to $1.2013 from $1.2035.

You may also like

Update Required Flash plugin