logo-loader

S&P 500 lower as Netflix subscriber growth underwhelms

Last updated: 10:41 19 Jul 2016 EDT, First published: 05:41 19 Jul 2016 EDT

Netflix

What goes up must apparently come down, and so it was with US stocks at the outset.

Having ascended to new a high on Monday, the S&P 500 was around four points, or 0.2%, lower at 2,162 after 45 minutes of trading, weighed down by Netflix Inc (NASAQ:NFLX), which received bad reviews for its new subscriber numbers.

The mid-cap measure, the S&P 400, was faring similarly, down a couple of points at 1,543.

Wall Street is set for a steady start keeping momentum following Monday’s latest record close, and in early hours the attentions are on blue-chip earnings.

The Russell 2,000 index, which measure the performance of small caps, was even harder hit, shedding four points at 1,204.

On the Nasdaq exchange, the top riser was Golden Enterprises Inc (NASDAQ:GLDC), after it to a takeover by snack food company Utz Quality Foods.

Golden Enterprises shot up 58% to US$11.86, 14 cents shy of UTz’s 12 bucks a share offer for the owner of the Golden Flake snack food brand.

Also on the rise was Magnegas Corp (NASDAQ:MNGA), after it revealed successful sterilisation test results from the processing of septic water waste.  

The shares surged 31% to US$0.74.

In contrast, Super Micro Computer Inc (NASDAQ:SMCI) dropped 28% to US$18.94 after the green networked computing company lowered earnings guidance.

Sector peer VMware Inc (NYSE:VMW) went the other way, hardening US9.2% to US$68.32 after its second quarter figures, released after the end of trading yesterday, topped expectations.


Market preview

After both indices closed at new highs Dow Jones and S&P 500 futures pointed only slightly lower.

Attentions are narrowing on a stream of blue-chip financials for the second quarter.

Goldman Sachs surpassed expectations with quarterly profits of US$3.72 per share and revenue also beat consensus forecasts.

Lloyd Blankfein, Goldman chief executive, said all businesses performed well despite Brexit uncertainties.

Johnson & Johnson was another blue-chip unveiling better than expected numbers, as the consumer products firm made a US$1.74 per share quarterly profit thanks in particular to strong sales in the United States.

Tobacco company Philip Morris International fell short of market forecasts, however, with a US$1.15 per share quarterly profit missing consensus by 5 cents.

IBM reported a US$2.95 per share quarterly profit, 6 cents better than consensus, driven by growth in cloud and mobile computing.

Yahoo! was something of a curate’s egg, with revenues ahead of the market whilst adjusted profits disappointed. Overall the attention remains on the pending sell-off of the group’s internet assets, with news anticipated in the coming days.

Netflix’s user growth is seemingly getting ‘chilled’ as it brought in 1.7mln new accounts, versus expectations for 2.5mln, following a hike in subscription fees. 

Nevertheless, it still has a mass of 83mln users. It managed to meet revenue forecasts for the second quarter and beat market consensus for profit.

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

5 hours, 26 minutes ago