Wall Street closed mixed on Friday buoyed by mixed economic data and a spike in new cases of coronavirus infections. Moreover, disappointing earnings results and weak guidance of Netflix also dented investors’ sentiment. The S&P 500 and the Nasdaq Composite ended in the green while the Dow finished in red.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.2% to close at 25,671.95. Notably, 17 components of the 30-stock blue-chip index ended in the red while 13 closed in green. The tech-heavy Nasdaq Composite ended at 10,503.19, gaining 0.3%. Meanwhile, the S&P 500 rose 0.3% to end at 3,224.73. The Utilities Select Sector SPDR (XLU) surged 2.3%. Notably, seven out of eleven sectors of the benchmark index closed in positive territory while four in negative territory.

The fear-gauge CBOE Volatility Index (VIX) was down 8.3% to 25.68, its lowest closing since Jun 5. A total of 9.5 billion shares were traded on Friday, lower than the last 20-session average of 11.6 billion. Advancers outnumbered decliners on the NYSE by a 1.43-to-1 ratio. On Nasdaq, a 1.50-to-1 ratio favored advancing issues.

Netflix Declares Disappointing Q2 Earnings Results

On Jul 16, after the closing bell, Netflix Inc. NFLX reported weaker-than-expected second-quarter earnings results. Quarterly earnings of $1.59 per share, missed the Zacks Consensus Estimate by 13.6% and the company’s guidance of $1.81. However, revenues of $6.15 billion beat the consensus mark by 1.2%.

Notably, the company expects to add 2.50 million paid subscribers in the third quarter, much lower than 6.77 million added in the year-ago quarter. Consequently, shares of Netflix tumbled 6.5% on Jul 17. Netflix carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strog Buy) stocks here.

Spike in Coronavirus New Cases

According to Johns Hopkins University, the United States has reported a record-breaking 77,200 coronavirus new cases on Jul 16.  The 7-day moving average of daily cases in the United States on Jul 16 was 65,459.

The states where the new coronavirus cases spiked include Florida, Texas, California, Arizona, North Carolina, South Carolina, Georgia, Tennessee, Alabama and Louisiana. At present, the United States has more than 3.57 million confirmed coronavirus cases and more than 138,000 deaths. Notably, the number of cases crossed 3 million from 2 million in less than a month time.

Economic Data

The Department of Commerce reported that housing starts jumped 17.3% in June to a seasonally adjusted 1.186 million units form an upwardly revised 1.011 million units in May. The consensus estimate was 1.179 million units.

The building permits rose 2.1% in June to a seasonally adjusted 1.241 million units form an downwardly revised 1.216 million units in May. However, the consensus estimate was 1.28 million units.

The National Association of Home Builders/Wells Fargo Housing Market Index came in at 72 in July after gaining 14 points. Of the three components, current sales conditions advanced 16 points to 69, sales expectations in the next six months rose 7 points to 75 and buyer traffic grew 15 points to 58.

The University of Michigan reported that its preliminary survey of U.S. consumer sentiment fell to 73.2 in July from 78.1 in June. The consensus estimate was 79.5. The present situation index dropped to 84.2 from 87.1 in the last month. The expectations index slipped to 66.2 from 72.3 in June.

Weekly Roundup

The last week was a mixed one for Wall Street. The Dow and the S&P 500 gained 2.3% and 1.3% respectively. Both indexes posted third straight weekly gains. On the other hand, the Nasdaq Composite lost 1.1%, its first weekly loss in three.

Positive clinical trial results of some of the potential coronavirus drugs and expectation of next round of fiscal stimulus in early next month boosted the Dow and the S&P 500 rally, while the tech-heavy Nasdaq Composite lost due to profit booking of some major tech stocks by investors as they become overvalued.

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