Netflix boosts tech shares as US stocks rise
Technology shares led US stocks higher Tuesday after Netflix surged on strong subscriber growth and Google parent Alphabet hit an all-time high as its new Pixel phone garnered positive reviews.
Netflix soared 19 per cent after reporting 3.57 million in new subscribers for the third quarter and projecting a gain of 5.2 million in the fourth quarter, much better than expected. The results boosted hopes that other tech earnings may also be strong in the coming weeks.
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Google parent Alphabet, Tesla Motors and Electronic Arts all rose two per cent or more. Amazon and Facebook also rose. The tech-rich Nasdaq Composite jumped 0.9 per cent to 5,243.84. The Dow Jones Industrial Average rose 0.4 per cent to 18,161.94, while the broad-based S&P 500 gained 0.6 per cent to 2,139.60.
UnitedHealth was the biggest gainer in the Dow, climbing 7.1 per cent after reporting that third-quarter earnings jumped 23.2 per cent to $2.0 billion, due in part to a strong performance in its Optum consulting and data analysis business. Other health insurers also moved higher, with Aetna winning 2.6 per cent and Cigna 4.2 per cent.
Goldman Sachs climbed 2.2 per cent as it reported a 58 per cent jump in third-quarter earnings to $2.1 billion due in part to a strong performance in its trading division. But IBM lost 2.6 per cent despite reporting better-than-expected earnings with some analysts expressing disappointment in the tech giantâ€™s profit margins. Revenues also fell for the 18th straight quarter.
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Johnson & Johnson fell 2.7 per cent on concerns about new competition from Pfizer and other drugmakers with J&Jâ€™s blockbuster arthritis treatment Remicade. Chief financial officer Dominic Caruso predicted â€œmodestâ€ impact on Remicade sales due to the new competitors. Dow member Visa fell 0.7 per cent on the surprise news that chief executive Charlie Scharf would resign in December and be replaced with Alfred Kelly, Jr, a former president of American Express.