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

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22/01/2025 21:42

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      Tech stocks up after $500 bln AI investment announcement
    

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      Netflix rallies after record subscriber numbers
    

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      Procter & Gamble gains after upbeat Q2 results
    

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      Indexes up: Dow 0.30%, S&P 500 0.61%, Nasdaq 1.28%
    

  
 (Updates prices with closing details)
    By Sinéad Carew and Johann M Cherian
       Jan 22 (Reuters) - Wall Street's indexes rose on
Wednesday, with the benchmark S&P 500 hitting an intraday record
high as investors cheered streaming video provider Netflix's
quarterly report and President Donald Trump's private-sector
artificial intelligence infrastructure investment plan.
    The technology sector  .SPLRCT  advanced 2.5% and was the
biggest gainer among the S&P 500's 11 major industry indexes
with its biggest boosts from AI heavyweights Nvidia  NVDA.O  and
Microsoft  MSFT.O . 
        Netflix  NFLX.O , the S&P's biggest gainer, finished up
9.7% after reporting a record number of subscribers for the
holiday quarter, enabling it to increase prices for most service
plans.
        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.
    But of the 11 major industry sectors only tech and
communications services  .SPLRCL , up 1.1%, notched daily gains
while the biggest decliner utilities  .SPLRCU , lost 2.2%. 
        "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 6.8% while U.S. traded shares
of ARM Holdings  ARM.O , a chip technology supplier that is
roughly 90% owned by SoftBank, rose 15.9%. Server maker Dell
 DELL.  added 3.6%. 
  
        "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 , which closed up 1.7%. 
        But without funding clarity, Stucky described the news
as "more of a pie in the sky kind of investment story." 
    The S&P 500  .SPX  ended up 37.13 points, or 0.61%, to
6,086.37 just a few points below its last record closing high of
1090.27, reached on Dec. 6.     
        The Nasdaq Composite  .IXIC  gained 252.56 points, or
1.28%, to 20,009.34 while The Dow Jones Industrial Average
 .DJI  rose 130.92 points, or 0.30%, to 44,156.73 
  
    Risk appetites have been boosted recently by strong economic
data and cooling inflation along with Trump's more moderate than
feared approach to tariffs since his Monday inauguration.
        However, investors are still cautiously 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
1.9% after beating second-quarter estimates, driven by growing
demand for its household items in the United States.
    Johnson & Johnson  JNJ.N  shares fell 1.9% although the
drugmaker reported fourth-quarter results above estimates.
    After rising on Tuesday, Ford  F.N  sank 3.8% as Barclays
downgraded the stock. Textron  TXT.N  shares fell 3.4% after it
forecast 2025 profit below estimates.
    Halliburton  HAL.N  slipped 3.6% after warning of softer
North America activity this year and posting downbeat quarterly
revenue.
    Declining issues outnumbered advancers by a 1.55-to-1 ratio
on the NYSE where there were 271 new highs and 57 new lows.
        On the Nasdaq, 1,835 stocks rose and 2,571 fell as
declining issues outnumbered advancers by a 1.4-to-1 ratio. The
S&P 500 posted 39 new 52-week highs and 4 new lows while the
Nasdaq Composite recorded 104 new highs and 95 new lows.
  
    On U.S. exchanges 13.89 billion shares changed hands, below 
the 15.33 billion average for the last 20 sessions.

 (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;))