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Wall Street rebounds after two-day decline; Netflix slides

Stock MarketsApr 21, 2021 04:31PM ET
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2/2 © Reuters. FILE PHOTO: A U.S flag is seen on the New York Stock Exchange in the Manhattan borough of New York City 2/2

By Herbert Lash and Shreyashi Sanyal

NEW YORK/BANGALORE (Reuters) -Wall Street rebounded on Wednesday after a two-day decline in a broad rally as a tilt toward stocks poised to benefit from a recovering economy offset Netflix Inc (NASDAQ:NFLX)'s sell-off after its disappointing results a day earlier.

Shares of Netflix slumped 7.4% 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 Composite Index overtook the S&P 500 in percentage gain shortly before the close.

Intuitive Surgical Inc (NASDAQ:ISRG) surged 9.9%to an all-time high as its results trounced estimates. The maker of robotic surgical systems vied with Microsoft Corp (NASDAQ:MSFT) and Tesla (NASDAQ:TSLA) 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 1.1%, outpacing the 0.8% gain in growth even as the growth-oriented but more concentrated Nasdaq climbed more than the S&P.

The Russell 2000 Index of small-cap stocks gained 2.4% in its biggest single-day advance since March 1.

"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 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."

The Nasdaq Composite added 1.19% to 13,950.22. The Dow Jones Industrial Average rose 0.93% to 34,137.31, while the S&P 500 gained 0.93% at 4,173.42.

Volume on U.S. exchanges was 9.22 billion shares, down from 10.44 billion average for the full session over the previous 20 trading days.

Verizon Communications Inc (NYSE:VZ) slid 0.4% after it lost more wireless subscribers than expected in the first quarter. Shares of T-Mobile US (NASDAQ:TMUS) Inc and AT&T Inc (NYSE:T) rose.

U.S. railroad operator CSX Corp (NASDAQ:CSX) rose 4.3% even after it missed estimates for first-quarter profit, hurt by frigid polar vortex temperatures, ongoing pandemic disruptions and higher fuel costs.

Advancing issues outnumbered declining ones on the NYSE by a 3.82-to-1 ratio; on Nasdaq, a 3.55-to-1 ratio favored advancers.

The S&P 500 posted 86 new 52-week highs and no new lows; the Nasdaq Composite recorded 71 new highs and 58 new lows.

Wall Street rebounds after two-day decline; Netflix slides
 

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Comments (4)
perplexed76 .
perplexed76 . Apr 21, 2021 2:03PM ET
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Gamblers don't trouble themselves with reason why to buy
Dennis Palcher
Dennis Palcher Apr 21, 2021 1:47PM ET
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It never falls.
Max German
7Max7 Apr 21, 2021 1:23PM ET
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lol yes they beat earnings there is yet not 1 compant in europe/us justify price cause earnings to weak even worse look back today earnings and 2Y ago today -17% lol all bullish ofcourse to think that market gained 30% higher what a joke they create a new credit crisis at all costs to keep stocks higher
Mitchel Pioneer
Mitchel Pioneer Apr 21, 2021 1:19PM ET
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The US Ponzi Scheme resumes its criminal march, as 2 days of losses magically vanish into thin air, and another tightrope walk "rally" unfolds in broad daylight.  Assume the position America.
 
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