Netflix lifts S&P, Nasdaq; J&J, Procter hold Dow in check

VIDEO: REUTERS

NEW YORK (REUTERS) - US stocks advanced on Tuesday (Jan 23), as strong results from Netflix helped lift the S&P and Nasdaq Composite, but the Dow Industrials were hemmed in by declines in Johnson & Johnson and Procter & Gamble.

Netflix touched a record high of US$257.71 and was last up 9.98 per cent at US$250.29, to cross the US$100 billion (S$130 billion) market value threshold. The video-streaming pioneer beat Wall Street targets for new subscribers in the fourth quarter.

Other stocks known as part of the "FAANG" group - Facebook, Apple, Amazon and Google parent Alphabet - also moved higher.

Insurer Travelers provided the biggest boost to the Dow, up 4.96 per cent after profit topped estimates.

"There has not been another time in this recovery where Main Street was doing well, where every economy in the world was doing well, and where so far there isn't really an overwhelming show that we have a significant inflation or interest rate problem which would mandate a valuation change," said Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis.

Paulsen cautioned, however, that as the rally continued more challenges were mounting that could cause a pullback. "If it ever does turn, there could be a fair amount of correction," he said.

The S&P 500 has reached a streak of 396 trading days without a 5 per cent correction, according to LPL Financial, the longest on record. The benchmark index has closed within 5 per cent of a record in 467 of the past 468 trading days.

S&P 500 earnings growth for the fourth-quarter is expected at 12.4 per cent, according to Thomson Reuters data through Tuesday morning. Of the 68 companies in the benchmark index that have posted results, 76.5 per cent have topped Wall Street expectations.

The Dow Jones Industrial Average fell 3.79 points, or 0.01 per cent, to 26,210.81, the S&P 500 gained 6.17 points, or 0.22 per cent, to 2,839.14 and the Nasdaq Composite added 52.26 points, or 0.71 per cent, to 7,460.29.

Johnson & Johnson fell 4.26 per cent, dragged down by a US$13.6-billion charge related to the new US tax law and a court ruling on a crucial patent on its blockbuster rheumatoid arthritis drug Remicade.

Procter & Gamble dropped 3.09 per cent as investors focused on a drop in gross margins at the world's largest consumer goods maker.

US President Donald Trump on Monday approved steep import tariffs on washing machines and solar panels, a move that was criticised by China, South Korea and Europe and stoked fears about potential retaliation.

In the wake of the tariffs, shares of Whirlpool rose 3.2 per cent and smaller solar names such as Real Goods Solar , up 33.04 per cent and Sunworks, up 10.71 per cent, moved higher.

Verizon slipped 0.43 per cent as its quarterly profit fell short of Wall Street estimates but revenue beat expectations as it added phone subscribers.

Advancing issues outnumbered declining ones on the NYSE by a 1.60-to-1 ratio; on Nasdaq, a 1.28-to-1 ratio favoured advancers.

The S&P 500 posted 135 new 52-week highs and one new low; the Nasdaq Composite recorded 232 new highs and 16 new lows.

Volume on US exchanges was 6.78 billion shares, above the 6.38 billion average for the full session over the last 20 trading days.