Stock Market Today: Netflix Rally Sends S&P 500 to New High

close-up of Netflix app icon on smartphone

(Image credit: Phil Barker/Future Publishing via Getty Images)

published 24 January 2024

Stocks shot higher out of the gate Wednesday, buoyed by a well-received earnings report from streaming giant Netflix (NFLX). Some strong economic data also helped boost equities.

At the close, the Dow Jones Industrial Average was down 0.3% at 37,806, while the Nasdaq Composite was up 0.4% at 15,481. The S&P 500 gained 0.1% to 4,868, its fourth straight record close.

Fueling upside in the main indexes was a positive reaction to Netflix's fourth-quarter results. The company reported year-over-year Q4 revenue growth of 12.5% to $8.8 billion, while earnings per share surged to $2.11 from last year's 12 cents. The top-line results came in higher than analysts were expecting, though the bottom-line figure fell short of estimates.

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Despite the bottom-line miss, Netflix stock jumped 10.7% Wednesday thanks to its stellar subscriber numbers. Specifically, the company added 13.1 million new subscribers globally – its biggest fourth quarter ever for subscription growth – easily outpacing its forecast for roughly 8.8 million.

"We enter 2024 with good momentum," Netflix said in its earnings report. For the first quarter, the company forecasts revenue to 13% to $9.2 billion and earnings to be up 56% to $4.49 per share.

"We thought NFLX might tread water in the first half of 2024 with operating income margins set, paid sharing dwindling and ads scaling," says Wells Fargo analyst Steve Cahall. But the company's "fourth-quarter outperformance indicates there's a lot of growth and margin still ahead."

Meta tops $1 trillion in market value

Elsewhere, Meta Platforms (META) became the latest stock to top $1 trillion in market value. META shares surged 1.4% today, bringing its market cap to $1.004 trillion. Meta's fellow Magnificent 7 stocks Apple (AAPL, -0.4%), Nvidia (NVDA, +2.5%), Alphabet (GOOGL, +1.1%), Amazon.com (AMZN, +0.5%) and Microsoft (MSFT, +0.9%) – which briefly topped a $3 trillion market value today – are already members of the trillion-dollar club.

Today's upside for META stock comes after Raymond James analyst Josh Beck named it a "top pick," citing "a growing narrative around one of the most compelling generative artificial intelligence (AI) monetization themes across tech unfolding that could scale to $25 billion to $60 billion of incremental revenue."

January PMI data comes in strong

In economic news, S&P Global's flash manufacturing purchasing managers index (PMI) jumped to a 15-month high of 50.3 in January from December's 48.2. Readings above 50 indicate expansion activity.

The services PMI, which measures activity in the services sector, hit a seven-month high of 52.9 in January.

This morning's PMI data "exceeded forecasts, but tomorrow's gross domestic product (GDP) report and Friday's personal consumption and expenditures (PCE) inflation print are likely to be more impactful on investor sentiment," says José Torres, senior economist at Interactive Brokers. "However, against this backdrop, market participants are expecting the first Fed cut to arrive in May vs March, with robust data serving to extend the journey across the monetary policy bridge."

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.