Netflix, China boost Wall Street as investors shrug off Brexit vote
By April Joyner
NEW YORK (Reuters) - U.S. stocks rose on Tuesday as technology and internet stocks gained on Netflix Inc's (NASDAQ: NFLX) plans to raise fees for U.S. subscribers and hopes of more stimulus for China's slowing economy fostered a risk-on mood among investors.
Netflix shares jumped 6.5 percent after the video streaming company said it was raising prices for its U.S. subscribers. Other internet stocks, including shares of Alphabet Inc (NASDAQ: GOOGL), Amazon.com Inc (NASDAQ: AMZN) and Apple Inc (NASDAQ: AAPL), also rose following the announcement.
The S&P 500 communication services index <.SPLRCL>, which includes Netflix and Alphabet, climbed 1.7 percent. S&P 500 technology stocks <.SPLRCT> advanced 1.5 percent.
Stocks also found support from hints by Chinese officials at more stimulus in the near term, easing concerns about a slowdown in the world's second-largest economy.
"We've had good news today overall," said J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago. "China is helping to defuse the daily emotional roller-coaster that is tariffs, and that Netflix thinks it can raise its subscription prices is also really good."
Wall Street's major indexes briefly pared some gains after the British parliament defeated Prime Minister Theresa May's Brexit divorce deal by a wide margin. The rejection of the deal could lead to a disorderly exit from the European Union or even to a reversal of the 2016 decision to leave the EU.
The S&P 500 and the Nasdaq still closed near the session's highs, however.
"No one was expecting anything great from the Brexit outcome," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. "The market was able to shrug this off."
The Dow Jones Industrial Average <.DJI> rose 155.75 points, or 0.65 percent, to 24,065.59, the S&P 500 <.SPX> gained 27.69 points, or 1.07 percent, to 2,610.3 and the Nasdaq Composite <.IXIC> added 117.92 points, or 1.71 percent, to 7,023.83.
Earlier in the day, gains were capped by disappointing earnings reports from big U.S. banks.
JPMorgan Chase & Co (NYSE: JPM), the largest U.S. bank by assets, missed quarterly profit estimates due to a slump in bond trading revenue, while Wells Fargo & Co (NYSE: WFC) said its loan book shrank and quarterly revenue fell in all of its major businesses.
JPMorgan shares erased the early losses and ended 0.7 percent higher. Wells Fargo shares pared losses to end 1.5 percent lower.
Health insurer UnitedHealth Group (NYSE: UNH) jumped 3.6 percent and was the top gainer on the Dow after reporting better-than-expected quarterly profit. UnitedHealth shares helped boost the S&P 500 healthcare index 1.7 percent.
Analysts expect S&P 500 profits to have grown 14 percent in the fourth quarter, much lower than the 20.1 percent growth forecast in October, according to IBES data from Refinitiv.
Advancing issues outnumbered declining ones on the NYSE by a 1.83-to-1 ratio; on Nasdaq, a 2.14-to-1 ratio favored advancers.
The S&P 500 posted one new 52-week high and two new lows; the Nasdaq Composite recorded 23 new highs and 17 new lows.
Volume on U.S. exchanges was 6.96 billion shares, compared to the 8.79 billion average over the last 20 trading days.
(Reporting by April Joyner; Additional reporting by Sinéad Carew in New York and Medha Singh and Sruthi Shankar in Bengaluru; Editing by Anil D'Silva and Sonya Hepinstall)