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Market Snapshot: U.S. stocks steady on COVID worries; Netflix weighs on Nasdaq

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U.S. stocks were steady early Wednesday as rising COVID-19 infections around the world contribute to worries over global economic growth, while the Nasdaq index saw some pressure after Netflix Inc. reported disappointing subscriber numbers.

What are major indexes doing?
  • The Dow Jones Industrial Average DJIA was up 111 points or 0.3 % to 33,934.
  • The S&P 500 SPX rose 8 points or 0.2%, to close at 4,143
  • The Nasdaq Composite COMP was up 13 points or 0.1% to 13,878.

Stocks fell for a second day Tuesday, with the Dow
DJIA,
+0.45%

shedding 256.33 points, or 0.8%. The S&P 500
SPX,
+0.21%

dropped 0.7%, while the Nasdaq Composite
COMP,
-0.00%

lost 0.9% and the small-cap Russell 2000
RUT,
+0.96%

slumped 2%.

What’s driving the market?

Stocks have seen a modest pullback after the S&P 500 index and Dow ended at records on Friday, with analysts largely tying the decline to concerns about a renewed rise in COVID-19 infections around the world, particularly in India and Japan.

“Sentiment was hurt predominantly due to renewed worries over rising global COVID infections which could slow down the reopening of some economies,” said Fawad Razaqzada, market analyst at ThinkMarkets, in a note. “In the case of U.S. stocks, there was also an element of profit-taking after the major indices had reached or neared record levels with the earnings season in full swing now.”

India reported a record number of cases again on Wednesday, counting more than 200,000 for a seventh straight day. The country’s hospitals are reported to be filling rapidly, it is running out of ICU beds and running low on oxygen.  News reports said Japanese officials were considering ordering a state of emergency for Tokyo and Osaka due to surging COVID-19 cases.

Read: Stocks are at all-time highs and the U.S. economy is booming. So why is everyone so freaked out?

“I call this the great re-assessment,” said Don Calcagni, chief investment officer for Mercer Advisors. “A lot of things are forcing market participants to hit the pause button and re-assess, including a rise in COVID cases. We’re also seeing some questionable earnings despite the overall headlines.”

“Look at Netflix,” Calcagni said in an interview. “Look at the bitcoin mini-crash. Look at the airlines — their earnings were very disappointing. I think a reassessment is occurring and I think that’s healthy. Right now we’re at peak everything. It doesn’t mean we can’t go higher from here but it is going to be harder.”

See: Stock-market sentiment shifts after investor euphoria pushed U.S. equities to record highs

The softer tone for markets comes as earnings season moved into full swing this week. Results from Netflix Inc.
NFLX,
-8.07%

late Tuesday sent shares of the streaming giant down 8% and was seen weighing on Nasdaq-100 futures.

Therese Poletti: There is a new normal for Netflix, and that is not necessarily a bad thing

Which companies are in focus?
How are other assets performing?
  • The yield on the 10-year Treasury note
    BX:TMUBMUSD10Y
     ticked up 1 basis point to around 1.572%. Yields and bond prices move in opposite directions.
  • The ICE U.S. Dollar Index
    DXY,
    +0.07%
    ,
     a measure of the currency against a basket of six major rivals, was up 0.1%.
  • Oil futures
    CL.1,
    -0.80%

     
    CLM21,
    -1.16%

    slid on prospects of diminished global demand, with the U.S. benchmark down $1.52 , or 2.4%, to trade near $61.15 per barrel.
  • Gold futures
    GC00,
    +0.84%

     gained 0.3%, $5.50 to trade near $1,783.90 an ounce.
  • In Europe, the Stoxx 600
    SXXP,
    +0.65%

     gained 0.4% and London’s FTSE 100
    UKX,
    +0.65%

     was up 0.3%.
  • In Asia, Hong Kong’s Hang Seng Index
    HSI,
    -1.76%
    ,
    closed 1.8% lower, while the Shanghai Composite SHCOMP was virtually unchanged and Japan’s Nikkei 225 NIK dropped 2%.

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