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Stock Market News For Jan 16, 2019

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Benchmarks ended in the green on Tuesday as Netflix buoyed gains for the broader markets. The streaming giant’s ascent triggered a broad-based rally for tech stocks that ensured that both S&P 500 and the Nasdaq ended at record levels.

Meanwhile, China’s ministry of finance pledged to bring the country’s economy back on track through judicious policymaking. Such comments overshadowed fears related to a possible slowdown in China’s economy and also boosted the market sentiment. Finally, the British parliament voted against prime minister Theresa May’s Brexit plan.

The Dow Jones Industrial Average (DJI) increased 0.7%, to close at 24,065.59. The S&P 500 increased 1.1% to close at 2,610.30. The tech-laden Nasdaq Composite Index closed at 7,023.83, gaining 1.7%. The fear-gauge CBOE Volatility Index (VIX) decreased 2.5% to close at 18.60. A total of around 6.96 billion shares were traded on Tuesday, lower than the last 20-session average of 8.79 billion shares. Advancers outnumbered decliners on the NYSE by a 1.83-to-1 ratio. On Nasdaq, a 2.14-to-1 ratio favored advancing issues.

How Did the Benchmarks Perform?

The Dow surged 155.8 points to end the session in positive territory. Gains for the 30-stock index were buoyed by increase in shares of Microsoft (MSFT - Free Report) and UnitedHealth (UNH - Free Report) , which increased 2.9% and 3.6%, respectively.

The S&P 500 rose 27.7 points to end in the green. Moreover, the broader index closed above the key level of 2,600 for the first time since Dec 13. Of the 11 major segments of the S&P 500, 9 ended in the positive territory, with healthcare leading the advancers. The Health Care Select Sector SPDR ETF (XLV) gained 1.8% on Tuesday.

Meanwhile, the Nasdaq jumped 117.9 points to overshadow other benchmarks and closed above the 7,000 level for the first time since Dec 13. Shares of Netflix (NFLX - Free Report) jumped 6.5% after the company announced plans to hike monthly prices.

 Such developments led the broader tech sector higher, boosting the tech-heavy Nasdaq. Tech heavyweights such as Facebook (FB - Free Report) , Amazon (AMZN - Free Report) , Apple (AAPL - Free Report) and Alphabet (GOOGL - Free Report) surged 2.5%, 3.6%, 2.1% and 3.1%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Netflix Boosts Markets, Overshadows Bank Disappointment

Video-streaming service provider Netflix announced on Tuesday that it was raising its monthly U.S. prices by as much 13% to 18%. This led to a rally in its stock and also boosted the overall tech and communications sector. Further, this marked the fourth time that the company has rolled out plans to hike prices, with the last hike taking place in 2017.

Moreover, this was the biggest hike in prices since Netflix’s launch 12 years ago. Analysts have cautioned that this hike will impact all of Netflix’s 58 million subscribers that the company had announced in September last year. The most popular monthly plan, which is currently priced at $11 a month, will now be hiked to $13 a month.

A surge in tech stocks not only boosted the broader markets but also overshadowed dismal earnings performance by the major banks. The largest U.S. bank in terms of assets, JPMorgan (JPM - Free Report) missed Q4 earnings and revenue estimates. The company came up with earnings of $1.98 per share, which missed the Zacks Consensus Estimate of $2.20. (Read More)

China Pledges to Spur its Economy

People’s Bank of China (PBOC) announced that it would take necessary steps to stimulate economic growth by increasing credit availability for smaller companies in the country. Also, China’s ministry of finance announced plans to reduce taxes and boost infrastructure spending in the country.

Further, PBOC’s Deputy Governor Zhu Hexin said that the Chinese bank would adopt “a more flexible monetary policy” because of a “complicated” economic scenario in the country. Such developments boosted investor sentiment and reduced fears related to a possible economic slowdown in China.

Brexit Hopes Crushed by the British Parliament

In a thumping defeat to prime minister Theresa May’s plans to exit the European Union (EU) by Mar 29, Brexit hopes were yet again shattered. The parliament voted 432 – 202 against the move. This came at a time when the country is continuously struggling to exit successfully from the EU. Such developments did not have much of an impact on the U.S. markets.

Economic Data

On the data front, the NY Empire State Index fell to 3.9% this month, below the previous month figure of 10.9%. Meanwhile, the PPI for the month of December fell 0.2% against the consensus estimate of a decrease of 0.1%. Also, the Core PPI increased 0.1%, in line with the consensus estimate.

Stocks That Made Headlines

United Continental (UAL - Free Report) Up 6% on Q4 Earnings & Revenue Beat

United Continental Holdings (UAL - Free Report) reported better-than-expected earnings and revenues in the fourth quarter of 2018. (Read More)

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