US STOCKS-S&P 500 hits record high with boost from Netflix results, AI investment plan

Textron

22/01/2025 21:01

(Updates prices to U.S. close)
    By Sinéad Carew and Johann M Cherian
       Jan 22 (Reuters) - Wall Street's indexes rose on
Wednesday, with the benchmark S&P 500 hitting a record high
during the session, as investors cheered streaming video
provider Netflix's quarterly report and technology shares
rallied a day after President Donald Trump announced a
private-sector artificial intelligence infrastructure plan.
    The technology sector  .SPLRCT  was the biggest gainer among
the S&P 500's 11 major industry indexes with hefty boosts from
AI chip leader Nvidia  NVDA.O  and Microsoft  MSFT.O . 
        Investors piled bets into the promise of AI the day
after Trump announced a 
    $500 billion private-sector AI infrastructure investment
plan from a venture involving Oracle  ORCL.N , OpenAI and
SoftBank  9984.T , even though there was no clarity on funding.
        Netflix  NFLX.O  rallied sharply after the company
reported a record number of subscribers for the holiday quarter,
enabling it to increase prices for most service plans.
        "This is just the excitement about the technology
investments," said Irene Tunkel, Chief U.S. Equity Strategist at
BCA Research, noting the market's narrow breadth on Wednesday. 
"Everything else just cannot compete with it."
  
        Shares in Oracle rallied along with server makers Dell
 DELL.  and U.S. traded shares of ARM Holdings  ARM.O , a chip
technology supplier that is roughly 90% owned by SoftBank. 
  
        "It's a story of big tech and everything else is hanging
in there," said Matt Stucky, chief portfolio manager for
equities at Northwestern Mutual Wealth Management, who
attributed much of Wednesday's rally, particularly in chip
stocks, to the AI announcement.  
    "The direct beneficiary, at least the beginning would be the
semiconductor space," he said pointing to outperformance in the
Philadelphia semiconductor index  .SOX .  
        But without funding clarity, Stucky described the news
as "more of a pie in the sky kind of investment story." 
    According to preliminary data, the S&P 500
 .SPX  gained 36.57 points, or 0.60%, to end at 6,085.81 points,
while the Nasdaq Composite  .IXIC  gained 251.89 points, or
1.27%, to 20,008.67. The Dow Jones Industrial Average
 .DJI  rose 120.97 points, or 0.27%, to 44,146.78.
        Risk appetites have been boosted recently with data
pointing to a strong economy and cooling inflation and Trump's
more moderate than feared approach to tariffs since his Monday
inauguration.
  
        Sill investors are watching for the president's trade
plans due to inflation concerns after he warned that tariffs on
imports from China, Mexico, Canada and the European Union could
be issued on Feb. 1. 
    The president has ordered federal agencies to complete
comprehensive reviews of a range of trade issues by April 1 -
the date that analysts at Barclays say markets should focus on.
        In individual stocks, Procter & Gamble  PG.N  advanced
after beating second-quarter estimates, driven by growing demand
for its household items in the United States.
    Johnson & Johnson  JNJ.N  shares fell although the drugmaker
reported fourth-quarter results above estimates.
    After rising on Tuesday, Ford  F.N  lost ground as Barclays
downgraded the stock. Textron  TXT.N  shares fell after it
forecast 2025 profit below estimates.
    Halliburton  HAL.N  slipped after warning of softer North
America activity this year and posting downbeat quarterly
revenue.

 (Reporting by Sinéad Carew in New York, Johann M Cherian, Purvi
Agarwal and Sukriti Gupta in Bengaluru; Editing by Arun Koyyur,
Maju Samuel and David Gregorio)
 ((sinead.carew@thomsonreuters.com; +13322191897;
johann.mcherian@thomsonreuters.com;))