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US stocks pop as Netflix results shine

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US stocks climbed on Wednesday, with the S&P 500 headed for another all-time closing high as upbeat tech earnings led by Netflix buoyed hopes the record-setting rally will continue.

The S&P 500 (^GSPC) added 0.6%, building on the new closing high hit on Tuesday, while the Dow Jones Industrial Average (^DJI) signaled a return to gains with a rise of about 0.4%, or nearly 150 points.

Tech stocks outperformed, with the Nasdaq Composite (^IXIC) popping about 0.9% after quarterly earnings from Netflix (NFLX) helped paint a picture of consumer health. The streaming giant’s shares rallied nearly 10% in early market trading after posting a surge in subscribers that far outstripped expectations.

Meanwhile, blowout updates from chip gear maker ASML (ASML) and software maker SAP (SAP) lifted optimism for a chip industry revival and an AI-fueled boom in techs.

Magnificent Seven laggard Tesla (TSLA) is the highlight in the cavalcade of corporate reports on Wednesday, with deliveries in focus as the EV maker faces a tough market and tough rivals in China. Tech stalwart IBM (IBM) is also on the docket.

While earnings are center stage, the debate over when the Federal Reserve will cut interest rates rumbles on.

With data driving expectations, updates on US manufacturing and services activity came in strong with economic output at its highest levels in seven months — just ahead of Thursday’s first reading of Q4 GDP and Friday’s release of the Fed-favored PCE inflation figures.

Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards

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  • US economic output hits seven month-high

    Economic output hit its highest level in 7 months during January.

    S&P Global’s flash US composite PMI, which captures activity in both the services and manufacturing sectors, came in at 52.3 in January, up from 50.9 in December and better than the 51.0 that had been expected by economists.

    S&P reported business confidence reached a 20-month high while prices charged, a measure of inflation, rose at its slowest pace since May 2020. The manufacturing index saw the largest increase with a reading of 50.3 up from 47.9, the month prior. The services component of S&P’s report showed the index registered 52.9 this month, up from 51.4 in December.

    Any reading above 50 for these indexes represents expansion in the sector; readings below 50 indicate contraction.

    “An encouraging start to the year is indicated for the US economy by the flash PMI data, with companies reporting a marked acceleration of growth alongside a sharp cooling of inflation pressures,” Chris Williamson, the chief business economist at S&P Global Market Intelligence said in the release.

    Source: S&P GlobalSource: S&P Global

    Source: S&P Global

  • Markets open higher as S&P heads for another record high

    Stocks opened higher on Wednesday with the S&P 500 (^GSPC) on pace to achieve another record close.

    The benchmark index added 0.6%, building on the new closing high hit on Tuesday, while the Dow Jones Industrial Average (^DJI) rose about 0.4%, or nearly 150 points.

    The Nasdaq Composite (^IXIC), buoyed by Netflix’s strong results, surged about 0.9% as tech stocks once again take center stage with Tesla results on tap after the bell.

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