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Stocks close higher on tech company rally, outlook for China stimulus

Comments from the People’s Bank of China suggesting efforts to spark economic growth helped lift equities

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Tech stocks were led higher by Netflix's price increases

US stock indexes closed higher on Tuesday as a hike in membership prices by the streaming service Netflix Inc (NASDAQ:NFLX) triggered a rally in tech stocks.

Comments from the People’s Bank of China suggesting the country's leaders will bolster efforts to spark economic growth by extending credit more readily to small businesses and cutting taxes also added to the optimism lifting markets.

The Dow Jones Industrial Average rose 155.75, or 0.7%, to 24,065.59, pushed up by gains by UnitedHealth Group Inc and Microsoft Corp.

The S&P 500 added 1.1% to 2,610.30 while the tech-laden Nasdaq climbed 1.7% to 7,023.83.

Netflix rallied after the streaming service moved to push up its monthly membership prices in the US. Its classic $11 plan will jump to $13 per month, and price hikes of $1 to $2 will apply to its other subscriptions.

The move created a contagion effect in tech stocks, with the S&P 500 Information Technology sector jumping.

First Republic Bank surged after the regional bank posted robust fourth-quarter results. JPMorgan Chase & Co reversed course to gain after enduring losses earlier in the day stemming from its reporting fourth-quarter results that missed estimates.

Elsewhere, in Canada, Toronto’s TSX added 0.5% to hit 15,046.28 as a jump in the price of crude oil boosted energy stocks, with Nuvista Energy Ltd and CES Energy Solutions Corp among the biggest gainers.

Small-cap stocks performed well, with the Russell 2000 index nudging up 0.9% to 1,445.22.

1:30 PM: Tech rally and positive China news boost US stocks and offset disappointing JP Morgan Chase results

US stocks rose higher in afternoon trade on Tuesday as a hike in membership prices by the streaming service Netflix (NASDAQ:NFLX) sparked a rally in tech stocks.

Comments from the People’s Bank of China suggesting the country's leaders will bolster efforts to spark economic growth by extending credit more readily to small businesses and cutting taxes also added to the optimism lifting markets.

As the afternoon wore on, the Dow Jones Industrial Average traded 136 points higher to hit 24,047, pushed up by a 2.9% gain by UnitedHealth Group Inc and a 2.9% jump from Microsoft Corp.

The S&P 500 added 0.98% to 2,608 while the tech-laden Nasdaq climbed 115 points to 7,021.

Netflix (NASDAQ:NFLX) climbed 7% to $356.21 after the streaming service moved to push up its monthly membership prices in the US. Its classic $11 plan will jump to $13 per month and price hikes of $1 to $2 will also apply to its other subscriptions.

The move created a contagion effect in tech stocks, with the S&P 500 Information Technology sector jumping 1.5% to 1,122.

First Republic Bank also surged by 11% to hit $93.63 after the regional bank posted robust fourth-quarter results. In its latest reporting period, the San Francisco bank posted earnings per share of $1.29 on revenue of $972.2 million, whizzing past Wall Street’s forecasts.

And JP Morgan Chase reversed course to add 0.5% and hit $101.48 after enduring losses earlier in the day stemming from its reporting of fourth-quarter earnings and revenue which missed estimates.

Elsewhere, in Canada, Toronto’s TSX added 71 points to hit 15,047 as a jump in the price of crude oil boosted energy stocks, with Nuvista Energy Ltd and CES Energy Solutions Corp among the biggest gainers.

Small-cap stocks also performed relatively well, with the Russell 2000 index nudging up by 0.5% to 1,440.

10:30 AM: US stocks open higher as Wall Street digests bank earnings, news of stimulus efforts out of China

US stocks opened higher Monday as Wall Street digested disappointing bank earnings and news of new stimulus efforts out of China.

The Dow Jones Industrial Average climbed 117.12 points, or 0.49% to 24,026.96 but its gains were capped by a decline in shares of JPMorgan Chase & Co. The bank fell 1.3% to $99.61 as the lender posted declines in revenue in three of its four main businesses in the fourth quarter.

Meanwhile, the S&P 500 rose 0.63% to 2,598.86 led higher by First Republic Bank, Edwards Lifesciences and Netflix which shot up nearly 6% after it announced new prices would take effect immediately for new customers. Existing subscribers will be grandfathered in over the next three months. Previous rate hikes have had little effect on subscribers, and have traditionally buoyed the stock.  

The Nasdaq Composite index gained 82.09 points, or 1.19% to 6,988, led higher by Netflix, Baidu, Adobe and Facebook.

Elsewhere, the Russell 2000 index of small-cap stocks gained 0.30% to 1,437.18.

7:15 am: Wall Street stocks seen bouncing back after yesterday's fall as big banks and UK Brexit vote in focus

Wall Street shares are seen bouncing back after yesterday's falls as European benchmarks are higher and Asian stocks also rose.

It comes as earnings from the big banks continue and global investors eye a key vote in Parliament in the UK later today over Brexit and as China revealed new policy aimed at boosting growth.

Citigroup (NYSE:C) was the first US bank to report yesterday, with 4Q revenues lower than scribes on the street had been expecting.

Today, it is the turn of JPMorgan Chase (NYSE:JPM) and scandal-ridden Wells Fargo (NYSE:WFC), which will be posting numbers before the bell.

 

Yesterday, the Dow Jones Industrial Average closed at 23,909 - down around 86 points, while the tech-heavy Nasdaq slipped over 65 at 6,905. The broader -based S&P 500 closed down around 13 points at 2,582.

Up in Toronto, the TSX closed over 36 points higher at 14,975.

In futures trade, the Dow Jones is up 113 points; the Nasdaq is ahead by 37 and the S&P 500 futures are ahead by nearly 10 points.

In London, FTSE 100 is up over 16 points at the time of writing, while the German DAX added over 21 at 10,877. The French CAC 40 is also higher - up around 14 points.

Connor Campbell, an analyst at spreadbetting firm Spreadex in London, said: "Things could pick back up again dependant on what the Dow Jones does after the bell.

"At the moment the index is looking at a 100 point jump, one that would return the Dow to 24000 and leave it prepped for a fresh one month high if it so felt like it."

On the British currency ahead of the Brexit vote, he said: "Sterling was still relatively chilled given that the next 24 hours or so could end up defining the month, the year, and, potentially, a generation.

"Against the dollar it slipped 0.2%, with cable dipping back under $1.285, but against the euro it added another 0.2% following those Eurozone growth woes."

In Asia overnight, Japan's Nikkei 225 added over 195 points to 20,555, while the Shanghai Composite Index gained over 34 at 2,570.

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