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Wall Street rises as Netflix boosts tech, internet stocks

Wall Street rises as Netflix boosts tech, internet stocks

Traders work on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

NEW YORK: US stocks rose on Tuesday (Jan 15) as technology and internet stocks gained on Netflix Inc's plans to raise fees for US subscribers and hopes of more stimulus for China's slowing economy fostered a risk-on mood among investors.

Netflix shares jumped 6.3 per cent after the video streaming company said it was raising prices for its US subscribers. Other internet stocks, including shares of Alphabet Inc , Inc and Apple Inc, also rose following the announcement.

The S&P 500 communication services index, which includes Netflix and Alphabet, climbed 1.5 per cent. S&P 500 technology stocks advanced 1.4 per cent.

Stocks also found support from hints by Chinese officials at more stimulus in the near term, easing concerns about a slowdown in the world's second-largest economy.

"We've had good news today overall," said J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago. "China is helping to defuse the daily emotional roller-coaster that is tariffs, and that Netflix thinks it can raise its subscription prices is also really good."

Wall Street's major indices briefly pared some gains after the British parliament defeated Prime Minister Theresa May's Brexit divorce deal by a wide margin. The rejection of the deal could lead to a disorderly exit from the European Union or even to a reversal of the 2016 decision to leave the EU.

"As the (Brexit) headlines crossed the tape there was a knee-jerk reaction, but we've recovered because the outcome was largely priced in already," said Chris Zaccarelli, chief investment officer of Independent Advisor Alliance in Charlotte, North Carolina.

The Dow Jones Industrial Average rose 155.75 points (0.65 per cent) to 24,065.59, the S&P 500 gained 27.69 points (1.07 per cent) to 2,610.30 and the Nasdaq Composite added 117.92 points (1.71 per cent) to 7,023.84.

Earlier in the day, gains were capped by disappointing earnings reports from big US banks.

JPMorgan Chase & Co, the largest US bank by assets, missed quarterly profit estimates due to a slump in bond trading revenue, while Wells Fargo & Co said its loan book shrank and quarterly revenue fell in all of its major businesses.

JPMorgan shares erased the early losses and were last up 0.8 per cent.

Health insurer UnitedHealth Group jumped 3.1 per cent and was the top gainer on the Dow after reporting better-than-expected quarterly profit.

Analysts expect S&P 500 profits to have grown 14 per cent in the fourth quarter, much lower than the 20.1 per cent growth forecast in October, according to IBES data from Refinitiv.

Advancing issues outnumbered declining ones on the NYSE by a 1.60-to-1 ratio; on Nasdaq, a 1.71-to-1 ratio favoured advancers.

The S&P 500 posted one new 52-week high and two new lows; the Nasdaq Composite recorded 22 new highs and 15 new lows.

Source: Reuters/de


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