US stocks gain as Netflix earnings blowout spurs tech rally

January 23, 2021

(Photo by Jacopo Raule/Getty Images)

  • US stocks gained on Wednesday as investors cheered a strong earnings report from Netflix that included a new plan to rely less on the debt markets to fuel its content creation.
  • Tech stocks surged higher, emboldened by Netflix’s better than expected earnings report.
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US stocks moved higher on Wednesday, with the technology sector leading the market higher following a strong earnings report from Netflix.

Shares of Netflix jumped as much as 13% after the company said it added a record 37 million paid subscribers in 2020, helping drive its operating income up 76% to $4.6 billion.

The video-streaming company also said it expects positive free-cash-flow generation going forward and will begin to stop relying on the debt markets to fuel its content lineup, leading it to potentially explore a stock buyback program going forward. 

Here’s where US indexes stood after the 9:30 a.m. ET open on Wednesday:

  • S&P 500: 3,822.76, up 0.63%
  • Dow Jones industrial average: 31,015.98, up 0.28% (85.46 points)
  • Nasdaq composite: 13,335.55, up 1.05%

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Morgan Stanley reported fourth quarter earnings that beat analyst expectations, driven by the firm’s trading unit and wealth management arm. 

Popular cryptocurrencies like bitcoin and ethereum pulled back on Wednesday after Treasury Secretary nominee Janet Yellen said it might make sense to “curtail” their use as they are mainly used for illicit activities in a transactional sense.

Alibaba surged 7% after its founder Jack Ma resurfaced in a video conference. Ma has not been seen in public for months as Chinese regulators clamped down on the Ant Group IPO and Alibaba’s selling practices. 

Oil prices rose. West Texas Intermediate crude jumped as much as 1.32%, to $53.68 per barrel. Brent crude, oil’s international benchmark, gained 1.13%, to $56.63 per barrel, at intraday highs.

Gold rose as much as 1.05%, to $1,859.60 per ounce.

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