Nasdaq closes at new record high; Netflix surges

Traders work on the floor of the New York Stock Exchange July 16, 2015.
Traders work on the floor of the New York Stock Exchange July 16, 2015.REUTERS

NEW YORK (AFP) - The Nasdaq vaulted to a new record high Thursday after a strong earnings report from Netflix helped spark a fairly broad rally led by technology stocks.

The tech-rich Nasdaq Composite Index powered up 64.24 points (1.26 per cent) to 5,163.18, about three points above its prior record set on June 23.

The Dow Jones Industrial Average rose 70.08 (0.39 per cent) to 18,120.25, while the broad-based S&P 500 gained 16.89 (0.8 per cent) at 2,124.29.

Netflix surged 18 per cent following an earnings report that was light on profits but heavy on growth. The video streaming service said subscriptions jumped 3.3 million in the second quarter, with the bulk of the increase outside the US. Earnings were US$26 million (S$35 million), down from US$71 million a year ago.

"It's a big believers story, the way Amazon is," said Mace Blicksilver. "On growth metrics, you must own it."

Blicksilver said the market was further lifted by a confluence of benign events: The passage of an austerity package by the Greek parliament that opens the way to a potential bailout; congressional testimony by Federal Reserve chair Janet Yellen that was seen as dovish on interest rates; and the steadying of the Chinese stock market.

"It's hard to see what's to be bearish about at this very moment," he said.

Leading technology companies moved higher, including Apple (+1.3 per cent), Facebook (+1.2 per cent) and Google (+3.5 per cent).

Another giant tech company, online retailer Amazon, bolted 3.1 per cent higher after announcing that customers bought 34.4 million items on Wednesday when it offered special promotions to buyers of its "Prime" service, a US$99-a-year package delivery programme.

EBay surged 3.4 per cent as it beat expectations on sales and earnings and confirmed the split off on Friday of subsidiary PayPal.

Citigroup jumped 3.8 per cent after reporting second-quarter earnings of US$1.51 per share, much above the US$1.34 projected by Wall Street analysts.

Dow member Goldman Sachs fell 0.8 per cent as its reported lower second-quarter earnings, dragged down by US$1.45 billion in legal charges.

Other companies to report earnings included chipmaker Intel (+0.7 per cent), tobacco giant Philip Morris International (+3.2 per cent), paint company Sherwin-Williams (-7.4 per cent) and health care giant UnitedHealth Group (-0.7 per cent).

Bond prices rose. The yield on the 10-year US Treasury dipped to 2.35 per cent from 2.36 per cent on Wednesday, while the 30-year fell to 3.11 per cent from 3.15 per cent. Bond prices and yields move inversely.