The Dow Jones Industrial Average and S&P 500 chalked up record closing highs on Friday, with the Nasdaq also in positive territory, as markets were boosted by an earnings-driven jump in Netflix shares and broader gains across technology stocks.
Market Snapshot
The S&P 500 rose 23.20 points, or 0.40%, to 5,864.67 points, while the Nasdaq Composite advanced 115.94 points, or 0.63%, to 18,489.55. The Dow Jones Industrial Average gained 36.86 points, or 0.09%, at 43,275.91.
Market Movers
Netflix reported third-quarter revenue of $9.83 billion, beating analysts' expectations of $9.77 billion. Total paid subscribers came in at 282.7 million, versus Wall Street's estimate for 281.7 million. The streaming company also provided fourth-quarter revenue guidance that was ahead of consensus expectations on Wall Street. The stock was up 11%.
Nvidia was up 0.8% at the end of a volatile week for the chip maker. Shares hit a record closing high on Monday and an intraday high Thursday. Investors will be keeping an eye on the stock to see if it can continue this momentum in the weeks ahead as the market reacts to announcements from Big Tech companies that will report their spending on artificial-intelligence projects.
U.S.-listed shares of Taiwan Semiconductor Manufacturing were down 2.5%. The company said Friday that it was committed to complying with export controls, following a report that the U.S. government was probing whether it had breached any rules by making chips for China's Huawei Technologies.
Friday's drop comes after the stock surged 9.8% on Thursday. The gain came after the chip maker reported third-quarter earnings that jumped 54% from a year earlier to a record 325.26 billion New Taiwan dollars ($10.1 billion), driven by demand related to AI.
Intuitive Surgical posted third-quarter earnings and revenue that beat Wall Street estimates after the stock market closed Thursday. The surgical systems manufacturer said that Da Vinci procedures -- a surgical system made by Intuitive -- grew by approximately 18% worldwide compared with the same period last year. The stock was up 10% Friday.
CVS Health stock tumbled 5.2% after the retail pharmacy chain named executive David Joyner as its new CEO, succeeding Karen Lynch. Lynch stepped down from her position in agreement with the company's board of directors, the company said in the news release. Chairman Roger Farah said in the release that the board "believes this is the right time to make a change, and we are confident that David is the right person to lead our company for the benefit of all stakeholders."
Apple was up 1.2% after Counterpoint Research said sales of the iPhone 16 in China were up 20% compared with last year's model in the first three weeks after its launch. "We believe China sales for iPhone 16 will show a strong rebound over the next year with the beginning of this AI driven super cycle led by iPhone 16," analysts at Wedbush wrote in a research note.
American Express reported third-quarter adjusted earnings of $3.49 a share, which beat expectations for $3.29 among analysts tracked by FactSet. Revenue for the quarter of $16.6 billion just missed estimates of $16.7 billion. The credit card company also raised its full-year earnings guidance to between $13.75 and $14.05 a share, from $13.30 to $13.80 previously.
But the stock fell 3.2% Friday. Management said it expected revenue growth for 2024 to come in at the low end of its previously provided range, and that wealthier consumers are showing signs of caution.
Procter & Gamble was flat. The consumer products company reported quarterly core earnings of $1.93 per share, beating Wall Street estimates of $1.90 a share. Net sales of $21.7 billion were below the consensus estimate of $21.99 billion and fell 1% from the year-ago quarter.
SLB, the oil-services company formerly known as Schlumberger, reported third-quarter revenue of $9.16 billion, which came in below Wall Street expectations of $9.3 billion. Shares were down 4.7%. SLB was a Barron's stock pick in September.
Datadog stock gained 1.5% to $128.12 after UBS upgraded shares of the software company to Buy from Neutral and increased its price target to $150 from $125. A UBS analyst wrote in a research note that there are "green-shoots of improvement in the overall spending backdrop."
Intel stock rose 1.5% after a report from CNBC said the tech company is looking to sell at least a minority stake in its Altera unit worth around $17 billion. Intel didn't immediately respond to a Barron's request for comment.
Market News
US budget deficit tops $1.8 trillion in fiscal 2024, third-largest on record
The U.S. budget deficit grew to $1.833 trillion for fiscal 2024, the highest outside of the COVID era, as interest on the federal debt exceeded $1 trillion for the first time and spending grew for the Social Security retirement program, health care and the military, the Treasury Department said on Friday.
The deficit for the year ended Sept. 30 was up 8%, or $138 billion, from the $1.695 trillion recorded in fiscal 2023. It was the third-largest federal deficit in U.S. history, after the pandemic relief-driven deficits of $3.132 trillion in fiscal 2020 and $2.772 trillion in fiscal 2021.
Spirit Aero to furlough 700 workers for 21 days due to Boeing strike
Spirit AeroSystems told employees on Friday that it will furlough 700 workers for 21 days as an over one-month-long strike at U.S. planemaker Boeing eats into the supplier's cash and inventory space.
The furloughs, first reported by Reuters, will affect Spirit Aero employees working on Boeing's 767 and 777 widebody jet programs. Production of those jets was halted during the strike by more than 33,000 U.S. West Coast factory workers since Sept. 13.