They characterized today's market reaction to the Republican healthcare defeat last night as “muted” but all the indexes took a dive right out the gate this morning, the Dow to the tune of 160 points so I’m not sure that “muted” is accurate.  But all the markets recovered throughout the session and the Dow closed 55 points down.  Netflix had great news after the closing bell last night so it led a rally today that took the Nasdaq to another record high.  But investors have obviously decided to ignore the rumblings in Washington as just noise that’s not going away anytime soon and instead focusing on Q2, which is still expected to be up 8.5 percent.  Q1 had the best growth since 2011 so hopes are high.  The market does however have very muted expectations for any business friendly bills anytime soon and such progress is already all but priced out of equities.  Volume remains very low at only 5.7 billion so everyone is still waiting for more Q2.

tue JULY 18, 2017 / 5:26 pm

Nasdaq hits record on Netflix boost; Dow dragged by Goldman

Kimberly Chin

DJ: 21,574.73  -54.99     NAS: 6,344.31  +29.87      S&P: 2,460.61  +1.47        7/18

NEW YORK (Reuters) - A Netflix rally boosted the Nasdaq Composite to a record high on Tuesday while Goldman Sachs Group Inc (GS.N) dragged the Dow lower as earnings take center stage on Wall Street.  The Nasdaq posted its eighth consecutive session of gains, the longest streak since its 10-day string in February 2015.  The tech-heavy index was largely boosted by Netflix (NFLX.O). The movie streaming company rose 13.5 percent to $183.60 a day after it crushed Wall Street forecasts by reporting 5.2 million new streaming customers in the second quarter. 

As the second-quarter earnings season gears up, investors will put most of their focus on the performance of individual companies, analysts said.  "Earnings and guidance will move the market more than news out of D.C. Goldman is more important to the market today, as is Netflix, and that will be the case for the next couple of weeks," said Art Hogan, chief market strategist at Wunderlich Securities in New York.  The Dow was dragged lower by a drop in Goldman Sachs, which fell 2.6 percent to $223.31 after reporting a 40 percent fall in bond trading revenue and posted the weakest commodities results in its history as a public company. 

Other widely held stocks were active after posting results.  Johnson & Johnson (JNJ.N) gained 1.7 percent to $134.46 after saying expected sales growth to pick up in the second half of the year.  Harley-Davidson Inc (HOG.N) fell 5.9 percent to $48.95 after the motorcycle maker cut its forecast for 2017 shipments.

Analysts estimate an 8.5 percent rise in second-quarter earnings and a 4.7 percent increase in revenue for S&P 500 companies from a year earlier.

This follows a robust first quarter when U.S. companies posted the fastest rate of growth in earnings since 2011, according to Thomson Reuters I/B/E/S.

The Dow Jones Industrial Average .DJI fell 54.99 points, or 0.25 percent, to 21,574.73, the S&P 500 .SPX gained 1.47 points, or 0.06 percent, to 2,460.61 and the Nasdaq Composite .IXIC added 29.87 points, or 0.47 percent, to 6,344.31.  Both the Nasdaq and the S&P 500 set record closing highs.

The CBOE Volatility index .VIX ticked up to end at 9.89 on its fourth consecutive close below 10.

U.S. Senate Republicans failed to muster enough votes to repeal the Affordable Care Act, commonly known as Obamacare, but reaction was muted in the stock market. Analysts said the expectation for business-friendly legislation out of Washington is all but priced out of equities.

"Investors are looking for an investment that doesn't need the economy to do a lot better, and (where) it doesn't need Washington," said Matthew Peterson, chief wealth strategist for LPL Financial.

Technology .SPLRCT was the largest percentage gainer among the 11 S&P 500 sectors. Healthcare .SPXHC ended up less than 0.1 percent.

Despite the muted reaction from stocks, news of the healthcare bill's collapse sent the U.S. dollar to a 10-month low against a basket of major currencies .DXY.

Chipotle Mexican Grill Inc (CMG.N) was down 4.3 percent at $374.98 after it closed a restaurant in Virginia due to a suspected norovirus outbreak among some diners. 

Declining issues outnumbered advancing ones on the NYSE by a 1.10-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored decliners.

About 5.70 billion shares changed hands in U.S. exchanges, compared with the 6.48 billion daily average over the last 20 sessions.