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US stocks turn higher; Netflix slumps on slower growth

Wednesday, April 21, 2021 | Damian J. Troise And Alex Veiga, AP Business Writers


The New York Stock Exchange is seen in New York, Monday, Nov. 23, 2020. Stocks are opening lower on Wall Street again, continuing a weak spell that pulled major indexes lower over the previous two days. The S&P 500 slipped 0.1% in the first few minutes of trading Wednesday, April 21, 2021, and the tech-heavy Nasdaq gave back 0.4%. (AP Photo/Seth Wenig)

Stocks were mostly higher in afternoon trading Wednesday as investors continued to work through company earnings reports and closely watch the bond market.

Health care stocks helped lead the broader market higher after several companies reported solid financial results. The gains were shared broadly, with industrial companies, banks and technology companies also lifting the market. Only communications and utilities stocks were lower.

The S&P 500 index was up 0.7% as of 3:06 p.m. Eastern, on track to snap a two-day slide. The Dow Jones Industrial Average rose 252 points, or 0.7%, to 34,072 and the Nasdaq rose 0.7%.

Small-company stocks far outpaced the broader market after slumping a day earlier. The Russell 2000 was up 2.1%. The yield on the 10-year Treasury held steady at 1.56%.

Netflix slumped 7% for the biggest decline in the S&P 500. The video streaming pioneer disappointed investors with its latest report on subscriber additions, which came in below its own forecasts. The gangbuster growth Netflix had seen during the pandemic appeared to be slowing as people start leaving their homes more and as competition from rival services picks up.

Much of the market's focus over the next two weeks will be on individual companies and how well their quarterly results turn out. This week roughly 80 members of the S&P 500 are due to report results, as well as one out of every three members of the Dow. On average, analysts expect quarterly profits across the S&P 500 to climb 24% from a year earlier, according to FactSet.

“Those companies that meet or beat on revenue and paint a nice picture for the rest of the year are being rewarded," said J.J. Kinahan, chief strategist with TD Ameritrade. “When a railroad company is saying we really see improvement for the second half of the year, that’s a really good sign."

Railroad operator CSX said its first-quarter profit fell because of higher expenses, but it expects to benefit as the U.S. economy strengthens further over the rest of the year. The stock rose 4.4%

Surgical device maker Intuitive Surgical rose 9.6% after handily beating analysts' first-quarter forecasts. Medical device maker Edwards Lifesciences rose 5.6% after also reporting strong financial results.

Investors are looking to justify the market's advance this year, despite the lingering pandemic and higher-than-normal unemployment. There are also signs of COVID infections increasing outside the U.S. in major economies such as India and Brazil once again.

Big companies to report their results after Wednesday's closing bell include Chipotle Mexican Grill and Las Vegas Sands. Both companies have been heavily hit by the pandemic, as many Americans cut back on travel and dining out at restaurants.

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7 Hotel Stocks Just Waiting For the Vaccine

Like any group of stocks related to travel and tourism, hotel stocks saw a steep drop in share prices in 2020. The leisure and hospitality sector that once had 15 million employees has lost 4 million jobs since February.

Many major cities will be feeling the ripple effects of the Covid-19 pandemic for years. However, there is ample evidence that shows the pandemic may be coming to an end. The number of new cases is dropping. The number of those getting vaccinated is rising. And even in the cities with the most restrictive mitigation measures, the slow process of reopening is beginning.

All of this can’t come fast enough for individuals who rely on the travel and tourism industry for their livelihood. Hotel chains had at least some revenue coming in the door. And when earnings season concludes, the more budget-friendly hotel chains may realize revenue that is 75% of its 2019 numbers. But that is not enough to bring the hotels to anywhere near full employment. Particularly with hotels that have bars and restaurants that have remained closed or open at limited capacity.

Many economists are optimistic that travel may begin to look more normal by the summer of this year. And the global economy may deliver 6.4% GDP growth this year. With that in mind, the hotel chains with the best fundamentals and the broadest footprint will be in the best position as the economy reopens.

View the "7 Hotel Stocks Just Waiting For the Vaccine".


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