Wall Street rebounds after two-day decline; Netflix slides
NEW YORK/BANGALORE (Reuters) -Wall Street rallied on Wednesday, rebounding from a two-day decline, as a tilt toward stocks poised to benefit from a recovering economy offset Netflix Inc's sell-off after its disappointing results.
Shares of Netflix slumped a day after the world's largest streaming service said slower production of TV shows and movies during the pandemic hurt subscriber growth in the first quarter.
But stocks rallied throughout the day, building steam as the tech-heavy Nasdaq overtook the S&P 500 in percentage gain shortly before the close.
Intuitive Surgical Inc surged to an all-time high as its results trounced estimates. The maker of robotic surgical systems vied with Microsoft Corp and Tesla Inc for much of the session as the biggest contributor to the S&P 500's upside.
Nine of the 11 S&P 500 sectors rose, with communication services, led by Netflix, and the defensive utilities sectors falling.
Economically sensitive value stocks rose at about double the gain in growth as measured by the Russell 1000 indexes.
"You take Netflix out of today's equation, it's simply a broad-based rally," said JJ Kinahan, chief market strategist at TD Ameritrade, adding technology shares still had room to run.
The VIX, CBOE's market volatility index, slid below 18, suggesting the market in days to come could be range-bound while also shrugging off a rebound in COVID infections, he said.
Analysts expect S&P 500 companies to post first-quarter earnings growth of 30.9% from a year earlier, Refinitiv IBES data shows.
Netflix's results dashed expectations but technology remains a major market focus.
"Investors feel more confident of the earnings growth prospects for technology," said Sam Stovall, chief investment strategist at CFRA Research in New York. "They would rather gravitate toward the sure thing, which right now is tech stocks."
Unofficially, the Dow Jones Industrial Average rose 0.94% to 34,139.02, the S&P 500 gained 0.93% to 4,173.46 and the Nasdaq Composite added 1.19% to 13,950.22.
Verizon Communications Inc slid after it lost more wireless subscribers than expected in the first quarter. Shares of T-Mobile US Inc and AT&T Inc rose.
U.S. railroad operator CSX Corp fell after it missed estimates for first-quarter profit, hurt by frigid polar vortex temperatures, ongoing pandemic disruptions and higher fuel costs.
(Reporting by Herbert Lash, additional reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Anil D'Silva, Sriraj Kalluvila and Arun Koyyur and Richard Chang)
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