The Dow and the S&P 500 have edged higher on gains in American Express after upbeat earnings and as initial jitters about an escalation in the Middle East conflict subsided, while Netflix weighed on the Nasdaq following its dour forecast.
Netflix slumped 6.6 per cent following the streaming video pioneer’s lacklustre second-quarter forecast.
“(Netflix) also noted that it would stop reporting subscriber numbers next year, which was taken as a sign that the current strength of customer growth could now be peaking,” said Richard Hunter, head of markets at online investment platform interactive investor.
“In order to maintain heightened valuation levels, attention has turned to the quarterly reporting season with high expectations for companies which are reporting.”
Cushioning the blue-chip Dow, American Express added 3.2 per cent after the credit card lender’s first-quarter profit surpassed Wall Street estimates.
Meanwhile, explosions echoed over an Iranian city on Friday in what sources described as an Israeli attack, but Tehran played down the incident and indicated it had no plans for retaliation – a response that appeared gauged towards averting a region-wide war.
Equities were rattled this week as investors readjusted their expectations over by how much the Fed would cut rates this year, with both the S&P 500 and the blue-chip Dow poised for a third weekly decline, while the Nasdaq was set for its fourth consecutive weekly loss, if current trend holds.
Federal Reserve policymakers have coalesced around the idea of keeping borrowing costs where they are until perhaps well into the year, given slow and bumpy progress on inflation, and a still-strong US economy.
Money markets are now pricing in about 39 basis points (bps) of cuts from the central bank this year, down from around 150 bps seen at the beginning of 2024, according to LSEG data.
US stocks suffered an outflow of $US4.1 billion ($A6.4 billion) in the latest week, according to Bank of America’s weekly ‘Flow Show’ report, their largest two-week outflow since December 2022.
The CBOE Volatility index, also known as Wall Street’s “fear gauge”, was last up 0.30 points at 18.30, after breaching the psychologically important level of 20 earlier in the session.
In early trading on Friday, the Dow Jones Industrial Average was up 182.74 points, or 0.48 per cent, at 37,958.12, the S&P 500 was up 2.50 points, or 0.05 per cent, at 5,013.62, and the Nasdaq Composite was down 54.49 points, or 0.35 per cent, at 15,547.01.
Seven of the 11 S&P 500 sectors traded higher, with energy stocks leading gains with a 1.1 per cent advance, while communication services dropped one per cent to lead declines.
Shares of Paramount Global jumped 9.9 per cent after a person familiar with the matter told Reuters that Sony Pictures Entertainment and Apollo Global Management are discussing making a joint bid for the company.
Procter & Gamble slipped 1.9 per cent after the consumer goods giant missed third-quarter net sales estimates.
Advancing issues outnumbered decliners by a 3.42-to-1 ratio on the NYSE by a 1.71-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and four new lows, while the Nasdaq recorded nine new highs and 90 new lows.