Nasdaq futures hit by Netflix; Dow Jones, S&P futures tick up

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The major averages ended Wednesday’s trading with a mixed performance, as investors reacted to the latest round of corporate results. The Dow climbed about 250 points, helped by a post-earnings rally in IBM. However, the Nasdaq dropped, as Netflix suffered a massive results-inspired sell-off and the megacaps generally lost ground.

The S&P (SP500) ended -0.1% and the Dow (DJI) finished +0.7%. The Nasdaq (COMP.IND) retreated 1.2%, dragged down by a 35% plunge in Netflix after reporting a decline in subscribers.

Looking at the preliminary closing numbers, the Dow advanced 249.59 points to finish at 35,160.79. The Nasdaq slid 166.59 points to conclude trading at 13,453.07. The S&P ended at 4,459.45, a dip of 2.76 points.

Eight of 11 S&P sectors finished higher, led by Real Estate, Health Care and Consumer Staples. Meanwhile, Communication Services finished as the biggest decliner, plunging 4%.

Along with the decline in Netflix, Meta Platforms put pressure on tech sectors as well. The former Facebook dropped nearly 8% after the @notablecalls account tweeted that a sell-side shop known for channel checks says quarter-to-date numbers have “fallen off the cliff,” including e-commerce weakness and market share loss. Traders speculate that the report is from Cleveland Research.

Looking to the bond market, the 10-year real yield turned positive overnight for the first time since 2020. In terms of nominal yields, the 10-year Treasury fell 7 basis points to 2.84%, while the 2-year is basically unchanged at 2.58%.

On the economic front, March existing home sales fell more than expected in March, down 2.7%. The numbers come on the heels of unexpected gains in March housing starts and building permits.

“A tight labor market and above-trend growth this year should support housing, yet higher market interest rates and ongoing Fed tightening will likely be headwinds to the sector,” MKM’s Michael Darda wrote. “Indeed, the Fed has said it intends for housing to slow and will continue tightening until it does so.”

“Thus, our view would be to focus on later cycle aspects of real estate (commercial over residential and reopening plays within commercial).”

And it’s 4/20, which brings a new cannabis ETF. And don’t rule out anything from Elon Musk. He already sent another tweet suggesting a tender offer for Twitter and Tesla reports after the bell.