Market Overview

by Kaichun Siu & Jin Zeng

On last Thursday 4/17/2014, just a little before the stock market closing for a long three day weekend, we saw a raise in the S&P 500 Index for a fourth straight session. But Thursday also marks the disappointing earnings reports from technology blue chips weighted on the Dow Jones Industrial Average, so the changes in the major three indexes are that S&P 500 index got added 2.54 points, or 0.1% to 1864.85 points, NASDAQ added 9.29 points, or 0.2% to 4095.52 points, which both The S&P 500 and NASDAQ benchmarked every day this week,  and lastly, The Dow Jones Industrial Average fell 16.31 points, or 0.1% to 16408.54 points before the three day long weekend. Over the past week, The S&P 500 has gained 2.7%, which caused a return in the buying’s in the technology and biotechnology shares after the selloff that occurred just the week before leading to a two month low for The S&P 500 index. The fourth straight winning session for The S&P 500 results in buyers beginning to stabilize in securing these sectors the past week, both NASDAQ Biotechnology and NASDAQ Internet Index saw a gain at 3.1% and 3.9% on Thursday. As we are looking closer to the quarterly earnings and revenue reports, many companies have already reported their quarterly earnings, the traders are expecting that trading activities are going to die down heading up to the three day weekend but many companies exceeded analyst’s forecast. Gordan Charlop, who leads the New York Exchange floor trading operations at brokerage Rosenblatt Securities pointed that the corporate earnings and revenue reports is the main indicator on how the recent share price moves, he mentioned that the market is acting on how it should be, we are beginning to see that investors and buyers are reacting base on the earning news which shows sign of a healthy and growing market. Netflix, one of the big winners on Thursday, in early stock movers, Netflix managed to rallied up 7.9% in pre-market trading after the video streaming company reported their earning report. Netflix is forecast to report sales of 1.27 billion dollars which is a huge increase from last year’s 1.02 billion dollars. Netflix share prices more than double from last year at $345.74 but behind by more than 24% during its peak on March 6^th at $458. However, the key point to take notice here is that the investor sentiment is solely base on new streaming video subscribers, which Netflix reported to have 33.4 million U.S video subscribers from the fourth quarter of 2013, and reported to added 2.25 million new domestic video subscribers. Interestingly, Netflix on Monday said that they’re planning on increasing the price of subscription by a dollar or two by the end of July of 2014. Last time we saw an increase in price of subscription was in July of 2011 when Netflix boosted their online and DVD rental mail package from $10 to $16. And just September of 2011, Netflix decided to separate the DVD rental package service from online video only company which caused a hit on the Netflix stock share prices from $300 in July of 2011 to just $60 by the end of 2011. Netflix currently plans on offering unlimited streaming movies and TV episodes for $7.99/Month, it would be interesting to see the future of Netflix with Amazon’s competition which are battling with original and exclusive content which continues to be one of the main issue for Netflix and the future in content acquisition cost remains to have a bearing on Netflix future outlook.