FX.co ★ Nasdaq Advances On Netflix Earnings, Dow Inches Up To Record High

After concluding the previous session with minimal change, stock markets showed a significant upward trend on Friday, led by gains in the tech-focused Nasdaq. The Dow Jones also saw an increase, ending the day at a new record high.

The Nasdaq surged by 115.94 points or 0.6%, closing at 18,489.55. Meanwhile, the S&P 500 rose by 23.20 points or 0.4%, reaching a record closing high of 5,864.67. The Dow rebounded from an earlier dip, finishing with a gain of 36.86 points or 0.1% at 43,275.91.

For the week, the Dow saw a 1.0% increase, while the S&P 500 and Nasdaq posted gains of 0.9% and 0.8%, respectively.

The Nasdaq's advance was bolstered by a significant rise in Netflix shares, which jumped 11.1% to a record high. This surge followed the company's announcement of third-quarter results that exceeded expectations on both revenue and earnings.

Investor sentiment remained positive regarding the U.S. economic outlook after a largely encouraging series of data releases yesterday.

In contrast, a notable decline in American Express shares constrained the Dow's upward movement, as the credit card company's stock fell 3.2%. This downturn came despite American Express exceeding profit forecasts, as its revenue fell short of expectations.

Turning to economic updates, the Commerce Department reported a slight decline in housing starts for September. The department noted a 0.5% decrease, bringing the annual rate to 1.354 million, following a 7.8% rise to a revised 1.361 million in August. Economists anticipated a 0.4% dip to an annual rate of 1.350 million.

The report also highlighted a substantial drop in building permits, which fell by 2.9% to 1.428 million, following a 4.6% increase to a revised 1.470 million in August. Predictions had pointed to a 1.0% decrease to an annual rate of 1.460 million.

Sector Insights

Gold stocks experienced a robust upswing, pushing the NYSE Arca Gold Bugs Index up by 4.8% to its highest close in nearly four years, driven by gold reaching new record prices.

Airline stocks demonstrated notable strength, with the NYSE Arca Airline Index soaring 3.0% to a six-month high.

Telecommunications stocks also enjoyed considerable gains, reflected by a 2.5% rise in the NYSE Arca Telecom Index.

Retail and housing stocks saw appreciable movements upwards, while oil service stocks declined sharply alongside a drop in crude oil prices.

Global Markets

Across Asia-Pacific, stock markets closed mostly higher on Friday. Japan's Nikkei 225 Index increased by 0.2%, while China’s Shanghai Composite Index rose by 2.9%, and Hong Kong’s Hang Seng Index climbed 3.6%.

In contrast, European markets showed mixed results. The UK's FTSE 100 Index fell by 0.3%, although France's CAC 40 Index and Germany's DAX Index both rose by 0.4%.

In the bond market, treasuries saw a recovery after previous pressure, with the benchmark ten-year note yield falling 2.3 basis points to 4.073%.

Outlook

The upcoming trading week may be influenced by reactions to the latest U.S. economic data, which includes reports on durable goods orders as well as new and existing home sales.

Additionally, forthcoming earnings announcements from major corporations are expected to capture the market's attention.