Tech rally boosts US stocks, Netflix surges

US stocks staged a broad advance on Tuesday. Strong earnings boosted optimism about the corporate reporting season.
Traders work on the floor of the New York Stock Exchange, April 17, 2018.
Traders work on the floor of the New York Stock Exchange, April 17, 2018.PHOTO: REUTERS

NEW YORK (AFP) - Wall Street stocks powered higher on Tuesday (April 17) on strong corporate earnings, with a blowout report from Netflix igniting a rally in technology shares.

The tech-rich Nasdaq Composite Index jumped 1.7 per cent to close the day at 7,281.10.

The Dow Jones Industrial Average rose 0.9 per cent to end at 24,786.63, while the broad-based S&P 500 advanced 1.1 per cent to 2,706.39.

Streaming company Netflix surged more than 9 per cent after announcing it added 7.4 million new subscribers in the past quarter as net income grew 63 per cent to US$290 million (S$380 million).

Other large technology companies also enjoyed big advances, including Amazon, which won 4.3 per cent and Google-parent Alphabet, which added 3.5 per cent.

Analysts said strong results gave the market the impetus to shift its fixation from trade war fears and other problems.

"It's back to the fundamentals for now, even though it could change in a moment with a tweet," said Karl Haeling of LBBW.

UnitedHealth Group jumped 3.6 per cent as it reported a 34.6 per cent increase in first-quarter profit to US$2.8 billion and lifted its full-year forecast. But Johnson & Johnson lost 0.9 per cent despite reporting better-than-expected earnings, while Goldman Sachs dropped 1.7 per cent after also topping forecasts.

In non-earnings news, Southwest Airlines fell 1.1 per cent after investigators reported a fatality following an emergency landing of a Southwest plane in Philadelphia.

Starbucks advanced 0.7 per cent as it announced it would close thousands of stores and corporate offices across the United States on May 29 to conduct "racial-bias education" following outrage over the arrest of two black men in one of its cafes.