The S&P 500 climbed to its fourth straight record high close on Wednesday, as Netflix surged following blowout quarterly results and a strong report from ASML fueled gains in chipmakers.
Market Snapshot
The S&P 500 climbed 0.08% to end the session at 4,868.55 points. The Nasdaq gained 0.36% to 15,481.92 points, while Dow Jones Industrial Average declined 0.26% to 37,806.39 points.
Market Movers
Netflix posted better-than-expected fourth-quarter revenue and a substantial subscriber beat in the period sent shares of the streaming giant up 11%. The company added a record 13 million subscribers in the quarter, bringing its worldwide total to 260 million. Analysts had been expecting an increase of 8.7 million. Netflix said it expects first-quarter revenue of $9.24 billion, up 13% and roughly in line with Wall Street estimates of $9.27 billion. It expects first-quarter profit of $4.49 a share, higher than analysts’ forecasts of $4.10 a share.
DuPont sank 14% after the company said it expects to earn 63 cents to 65 cents a share in the first quarter on sales of $2.8 billion. Wall Street was looking for profit of 88 cents and revenue of $3 billion.
AT&T reported fiscal fourth-quarter earnings below Wall Street expectations, but revenue came in above the consensus and the telecommunications company added more customers than had been forecast. The stock declined 3%.
ASML Holding rose 8.9% after the Dutch chip equipment maker reported fourth-quarter profit that rose from a year earlier and topped analysts’ estimates. The company said it was maintaining a “conservative view” for the year and expects 2024 revenue similar to 2023, when ASML reported revenue of €27.56 billion.
SAP, the German software giant, said it would undergo a restructuring program this year that will affect about 8,000 jobs. The company also reported fourth-quarter operating profit and revenue that topped analysts’ expectations and issued updated financial guidance for both 2024 and 2025. SAP said this year it would “further increase its focus on key strategic growth areas,” including artificial-intelligence software. U.S.-listed shares of SAP jumped 6.9%.
Advanced Micro Devices was up 5.9% to $178.29 after shares of the chip company were upgraded to Buy from Neutral at New Street Research and the stock price was set at $215. Analyst Pierre Ferragu noted in a research note that AMD CEO Lisa Su last year projected the market for datacenter artificial-intelligence chips at $400 billion by 2027. “Lisa is to be taken seriously; this forecast might eventually prove wrong, but it was certainly not pulled out of a hat,” Ferragu wrote.
Industrial conglomerate Textron jumped 7.8% after reporting fourth-quarter adjusted earnings of $1.60 a share, better than analysts’ estimates of $1.53.
Shares of Texas Instruments were down 2.5% after the chip maker reported a decline in fourth-quarter earnings and revenue and issued a forecast for the first quarter below expectations, citing softness in the autos and industrial sectors.
Abbott Laboratories fell 2.8% after the maker of healthcare products reported solid fourth-quarter earnings but issued light guidance.
Kimberly-Clark reported fourth-quarter adjusted earnings and sales that missed analysts’ estimates and shares of the maker of Kleenex were down 5.5%.
BlackBerry declined 18% after the Canadian security software company said it would sell $160 million of convertible senior notes due in 2029 in a private offering.
Market News
Microsoft hits $3 trillion market value, second to Apple
Microsoft's (MSFT.O), opens new tab stock market value crossed the $3 trillion milestone for the first time on Wednesday, retaining its place as the world's second most valuable company, just behind Apple (AAPL.O), opens new tab.
Microsoft and Apple shares have been vying for the top spot as the most capitalized stock on Wall Street since the start of the year, with the iPhone maker briefly losing its crown to the software giant earlier in January.
Tesla says it is 'between growth waves' as profit margins drop
Tesla (TSLA.O), opens new tab on Wednesday warned of "notably lower" vehicle sales growth this year and reported a fall in fourth-quarter gross margin as it cut prices and offered incentives to boost demand.
The company said it was in between two growth waves: one driven by the release of Models 3 and Y in 2017 and 2020, respectively, and a second wave that would start with the next-generation vehicle platform.
"In 2024, our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023, as our teams work on the launch of the next-generation vehicle at Gigafactory Texas," Tesla said in a statement.
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