The gains from Netflix and United Health extended into today when Netflix shot up 9 percent as it smashed subscriber estimates and United Health’s Q1 earnings continued to impress.  Amazon also gave the market a big boost with the Supreme Court showing signs that it might not force the issue of online sales taxes.  Additionally both U.S. homebuilding and industrial production increased more than expected.  All in all, it was either very positive news all day or, as one analyst noted, a denial of any bad news, but the Dow shot up over 200 with similarly impressive gains in both the Nasdaq and S&P.  Volume was once again below average at 6.1 billion. 

tue  APRIL 17, 2018 / 5:40 pm

Wall Street rises on earnings hopes, Netflix soars

Sinéad Carew

DJ:  24,786.63  +213.59       NAS:  7,281.10  +124.81        S&P:  2,706.39  +28.55     4/17

NEW YORK (Reuters) - U.S. stock indexes rallied on Tuesday on broad-based gains while Netflix and UnitedHealth earnings impressed investors and boosted optimism about the U.S. corporate reporting season.

Shares in Netflix (NFLX.O), the first of Wall Street’s leading momentum stocks to report earnings, rose 9 percent to close at a record high after the video-streaming pioneer smashed analysts’ quarterly subscriber estimates.  Amazon.com (AMZN.O) was the S&P’s biggest boost with a 4 percent jump, helped by Netflix results but also by signs the U.S. Supreme Court is hesitant to let states force out-of-state online retailers to collect sales taxes on purchases.

Analysts expect S&P 500 company profits to rise 18.6 percent in the first quarter, the biggest increase in seven years, according to Thomson Reuters data.

Strategists said strong earnings expectations as well as economic data from earlier in the day boosted equities.  “The overall picture is a positive one when it comes to earnings across sectors. There’s a nice little turbo boost being given by the tax reform legislation,” said Kristina Hooper, chief global market strategist at Invesco, in New York.

“Investors seem to be ignoring that which is not positive,” Hooper said after White House Economic Adviser Larry Kudlow said the United States was not convinced of the merits of joining the TPP. The market had gained the previous week when it appeared that U.S. President Donald Trump was keen on TPP.  “It’s easier for markets to focus on that which is positive and tangible rather than try to assess the potential outcome of protectionism,” she said.

The Dow Jones Industrial Average .DJI rose 213.59 points, or 0.87 percent, to 24,786.63, the S&P 500 .SPX gained 28.55 points, or 1.07 percent, to 2,706.39 and the Nasdaq Composite .IXIC added 124.81 points, or 1.74 percent, to 7,281.10. 

Data showed U.S. homebuilding increased more than expected in March amid a rebound in the construction of multi-family housing units. The PHLX housing index .HGX rose 1.12 percent.  Along with the housing data, Invesco’s Hooper said industrial production data was good sign for the economy. Industrial production registered a solid increase in last month as cold weather boosted utilities output and production at mines surged.

Ten of the 11 major S&P sectors rose, with the biggest boost coming from the technology index’s .SPLRCT 2.2 percent gain. The consumer discretionary index .SPLRCD rose 1.9 percent, boosted by Netflix and Amazon, which hit its highest level since March 27.

The financial index .SPSY was the sole S&P sector in the red, ending the day down 0.07 percent as bank stocks fell.  Goldman Sachs (GS.N) fell 1.6 percent as investors reacted to a pause in share buybacks and rising expenses, as well as indications it might be open to an acquisition. Goldman’s profit, however, beat Wall Street’s expectations.  UnitedHealth (UNH.N) jumped 3.6 percent after the largest U.S. health insurer raised its earnings forecast and posted results that beat Wall Street estimates.

Advancing issues outnumbered declining ones on the NYSE by a 2.77-to-1 ratio; on Nasdaq, a 2.14-to-1 ratio favored advancers.  The S&P 500 posted 30 new 52-week highs and no new lows; the Nasdaq Composite recorded 126 new highs and 42 new lows.

On U.S. exchanges 6.15 billion shares changed hands, below the 6.98 billion average for the last 20 trading days but higher than the last two sessions.