[New York Stock Market] Mixed Close... Nasdaq Down 1.22% on Netflix Plunge

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market closed mixed on the 20th (local time) as the 10-year Treasury yield slightly declined and investors monitored the earnings of major companies. Due to disappointing earnings, Netflix's stock price plummeted more than 35% that day, causing the tech-heavy Nasdaq index to also show a downward trend.

On the New York Stock Exchange (NYSE) that day, the Dow Jones Industrial Average closed at 35,160.79, up 249.59 points (0.71%) from the previous session. The large-cap S&P 500 index closed slightly lower at 4,459.45, down 2.76 points (0.06%). The tech-focused Nasdaq index recorded 13,453.07, down 166.59 points (1.22%).

The market was dominated throughout the day by disappointment over Netflix's earnings announced the previous day. Netflix's stock price fell 35.12% from the previous close, marking its worst day in about 18 years. This followed Netflix's announcement after the previous day's close that it had recorded a subscriber decline for the first time in 11 years. Wall Street investment banks including JP Morgan and Wells Fargo downgraded their investment ratings on Netflix one after another that day.

Netflix's plunge dragged down other streaming companies such as Disney (-5.56%), Roku (-6.17%), and Warner Bros. Discovery (-6.04%). This also weakened investor sentiment toward tech stocks, leading to the Nasdaq's decline. Amazon (-2.60%), Nvidia (-3.23%), and Meta (-7.77%) all fell in succession. Tesla also closed the regular session down 4.96% ahead of its earnings release after the market closed. Tesla is currently showing gains in after-hours trading thanks to an earnings surprise.

IBM rose 7.10% with sales and net income exceeding market expectations. Procter & Gamble (P&G) also jumped 2.66% on strong earnings. According to FactSet, about 12% of S&P 500 companies have reported first-quarter earnings so far, with 80% of those beating market expectations.

Sylvia Zabronski, CEO of DeFinance ETFs, said, "There seems to be some fatigue around interest rate hikes and inflation," adding, "There is a possibility that inflation is nearing its peak, and there is also positive sentiment about the earnings season," reflecting the market atmosphere.

The U.S. 10-year Treasury yield, which was around 2.9% the previous day, slightly declined to about 2.84% that day. Following the World Bank (WB), the International Monetary Fund (IMF) also downgraded its global economic outlook, raising concerns about a global recession and increasing upward pressure on Treasury prices.

On the same day, the U.S. Federal Reserve (Fed) expressed concerns about economic growth prospects clouded by the war between Russia and Ukraine and inflation in its Beige Book report on economic conditions.

The Beige Book, used as a basis for the May Federal Open Market Committee (FOMC) regular meeting, was released amid speculation that the Fed might implement a big step of raising the benchmark interest rate by 0.5 percentage points at once to curb U.S. inflation at its highest level in 40 years. The Fed pointed out regarding inflation that "inflationary pressures remain strong even after the last report was released," and "companies are quickly passing on cost increases to customers."

Oil prices rose on news of a decrease in U.S. crude oil inventories. On the New York Mercantile Exchange, May West Texas Intermediate (WTI) crude oil prices closed at $102.75 per barrel, up 19 cents (0.2%) from the previous session. June WTI prices, which become the near-month contract the following day, closed at $102.19 per barrel, up 14 cents (0.1%) from the previous session.