NEW YORK (AP) — U.S. stocks are climbing again Wednesday, led by Netflix after the streaming giant reported strong gains in subscribers.
The S&P 500 was 0.5% higher in early trading and on track to set a record for a fourth straight day. The Dow Jones Industrial Average was up 154 points, or 0.4%, as of 9:40a.m. Eastern time, and the Nasdaq composite was 0.7% higher.
They joined a worldwide rally after Chinese authorities announced measures to boost what’s been a disappointingly weak recovery for the world’s second-largest economy. Stocks surged 3.6% in Hong Kong to trim their loss for the new year to date to less than 7%.
On Wall Street, Netflix leaped 13.3% after it said it added many more subscribers during the last three months of 2023 than analysts expected. That took precedence for investors rather than the company’s profit, which fell short of analysts’ forecasts.
Also helping to bolster tech stocks broadly was ASML, the Dutch company that’s a major supplier to the semiconductor industry. It reported stronger profit and revenue than analysts expected, and its U.S.-listed stock jumped 7%.
Stocks broadly also got some relief from easing yields in the bond market. They’ve come down considerably since autumn on expectations that the Federal Reserve will cut interest rates several times this year. Such moves help relax the pressure on the economy and financial system.
The yield on the 10-year Treasury slipped to 4.09% from 4.14% late Tuesday. The two-year Treasury yield, which moves more on expectations for the Fed, fell more sharply to 4.29% from 4.38%.
Some reports coming later in the week could sway expectations for rate cuts this year. On Thursday, the government will give its first update for how quickly the economy grew during the final three months of 2023. A day later, it will give the latest monthly update on the measure of inflation that the Federal Reserve prefers to use.
Everyone on Wall Street is certain that cuts to rates are coming this year. The only question is when they would begin and how deeply they would go. Traders have recently been trimming their bets following some stronger-than-expected reports on the economy, which keep worries about a recession at bay but also could add upward pressure on inflation.
Virtually no one expects the Fed to cut rates at its meeting next week, but traders are still betting on a better than 50% probability that it will move in March, according to data from CME Group.
Until then, earnings reports from companies are causing some of the biggest moves.
Elevance Health jumped 3.6% after it reported profit and revenue for the latest quarter that squeaked past analysts’ expectations. Kimberly-Clark fell 4.8% after the maker of Huggies and Kleenex reported weaker profit and revenue than expected. DuPont tumbled 12.6% after it gave forecasts for upcoming revenue and profit that fell well short of analysts’ estimates. It said it’s continuing to see weak demand form China, among other challenges.
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AP Business Writers Elaine Kurtenbach and Matt Ott contributed.
