NEW YORK (awp international) – After the strong previous day, Wall Street also posted price gains on Wednesday. In late trading, the Dow Jones Industrial ran out of steam, but the leading index ended up up 0.71 percent to 35,160.79 points.
However, Netflix sent bad news – and thus clouded the mood, especially in the technology sector. With a fall in customer numbers for the first time in more than ten years in the past quarter, the streaming service shocked investors again after the disappointing outlook at the end of January. Netflix shares plummeted a little over 35 percent.
In the market-wide S&P 500 and above all in the technology-heavy Nasdaq 100, where the Netflix shares are listed, the development was more restrained compared to the Dow index. The S&P 500 closed down 0.06 percent to 4459.45 points, the Nasdaq 100 fell by 1.49 percent to 13,998.53 points after its very strong previous day.
In its most recent economic report (Beige Book), the US Federal Reserve wrote that inflationary pressure will remain high. Problems in the supply chains, the tense situation on the labor market and the increased production costs continue to pose challenges for the companies, it said. According to the report, the US economy has recently grown at a moderate pace. It is supported by increased consumption in retail and services, which in turn benefited from the weakening corona pandemic.
In view of the disappointing development in the past quarter, Netflix now wants to crack down on users who share their access data and is working on a cheaper version with advertising. However, the authors of the current Bernecker shareholders’ letter believe that the group should already have passed the peak of its success. The competition is catching up and it is becoming increasingly difficult for Netflix to build on past successes. The capital requirement is correspondingly high.
The Netflix disappointment also put other stocks in the industry under pressure midweek. The papers of the entertainment giant Walt Disney, which has its own streaming offers, lost 5.6 percent at the end of the Dow. The titles of the audio streaming service Spotify went down by almost eleven percent and those of the streaming device provider Roku lost 6.2 percent.
The computer group IBM, on the other hand, exceeded expectations in the past three months, which caused the shares at the top of the Dow to rise by 7.1 percent. The group benefited from growth in the software and consulting business. According to the analysts at DZ Bank, the spin-off of the more traditional IT service business is paying off more and more for IBM.
Procter & Gamble (P&G) shares were up 2.7 percent. The consumer goods group scored with strong quarterly figures and once again raised its target for organic sales growth in the current financial year.
The euro was trading at $1.0852 after the New York market close. The European Central Bank (ECB) had set the reference rate at 1.0830 (Tuesday: 1.0803) dollars, the dollar thus cost 0.9234 (0.9257) euros.
US Treasuries recovered somewhat from their recent losses. The futures contract for ten-year Treasuries (T-Note Future) rose by 0.29 percent to 119.45 points. The yield on ten-year government bonds fell to 2.85 percent. It thus moved away from the highest level reached the previous day at 2.98 percent since the end of 2018./ajx/he
— By Achim Jüngling, dpa-AFX —
–
