The market floor was divided on Wednesday as Wall Street traders tried to strategize a rush of first-quarter earnings activity. With that, the Dow Jones Industrial Average bounced back on strong earnings from Procter & Gamble. On the other hand, the Nasdaq Composite Index slumped after a colossal slip from typically-stalwart Netflix.
Overall, the 30-stock Dow Jones Industrial Average started the day up 248 points, which is about 0.7 percent. The Standard & Poors 500, though, remained flat on the day. As expected, the Nasdaq Composite fell 1.2 percent on the heels of news from the Netflix plunge.
Specifically, the first-quarter report shows that Netflix fell more than 36 percent thanks to a monumental drop in subscribers. The loss of 200,000 accounts is the biggest such decline for the streaming media provider since 2004 and the first reported subscriber loss in at least the last 10 years. All in all, this loss makes Netflix the worst-performing stock in the S&P 500 index for the year.
Netflix’s quarterly results preceded a new wave of downgrades from 10 Wall Street analysts who have also cited the firm’s weak financial guidance. This, of course, has likely contributed to the company also recently announced a strategy to introduce ad-supported options as soon as possible.
But Netflix’s struggle does not appear to be unique. Warner Bros, Disney, and Roku all dragged this month too. Discovery and Paramount also lost ground, at 4 percent and 7 percent, respectively. Perhaps more importantly, though, the Netflix loss also scared investors away from a handful of tech stocks. Tesla, for one, fell approximately 3 percent; Amazon and Salesforce both dipped by more than 2 percent.
Fortunately for investors, there is a bit of light at the end of this gloomy tunnel. Procter & Gamble helped buoy the Dow with a jump of 2 percent on better-than-expected results. This helped to boost their full-year revenue guidance. IBM—also a member of the Dow—jumped nearly 7 percent on their earnings revenue beat.