By Yasin Ebrahim
Investing.com – The S&P 500 gave up intraday gains Wednesday, as the slump in Netflix offset gains in the defensive corners of the market including consumer staples and healthcare stocks.
The S&P 500 rose 0.1%, the Dow Jones Industrial Average was up 0.8%, or 289 points, the Nasdaq fell 1%.
Netflix (NASDAQ:NFLX) fell more than 36% after reporting a decline in subscribers for the first time since 2011, and forecasting further pain ahead, with subscribers expected to fall by 2 million in the second quarter.
Wall Street analysts were quick to abandoned their bullish calls on the stock. “We are downgrading NFLX shares from Outperform to Perform and removing our $530 PT following a significant 1Q netadds miss that we attribute to elevated churn from more streaming service competition,” Oppenheimer said in a note.
Other streaming companies were also punished, with Walt Disney (NYSE:DIS), Roku (NASDAQ:ROKU), and Warner Bros Discovery (NASDAQ:WBD) nursing heavy losses.
International Business Machines (NYSE:IBM), however, helped limit downside in the overall tech sector following better-than-expected quarterly results that showed “demand [for cloud adoption] remains robust despite deteriorating macro environment,” Credit Suisse said in a note.
But even as the quarterly earnings season for tech gets underway, it was the defensive sectors of the market that were in the ascendency.
Procter & Gamble (NYSE:PG) rose more than 2% after reporting second-quarter results that topped investor expectations and raising its annual sales guidance as demand for cleaning and personal care products remained robust despite recent price hikes.
Financials were also keeping the broader market above the flatline, led by a 9% surge in M&T Bank Corp (NYSE:MTB) on stronger-than-expected quarterly results, underpinned by strength in its lending business.
In consumer discretionary, Tesla (NASDAQ:TSLA) was down 4% ahead of its quarterly results due after the closing bell.
“[A]ll eyes on the company's brutal production issues in China with Giga Shanghai having a three-week shutdown due to the zero Covid policy in the region,” Wedbush said.
Energy stocks were weighed down by 5% cooling oil prices even as the U.S. reported a larger-than-expected draw in weekly crude stockpiles. Baker Hughes (NASDAQ:BKR), meanwhile, slumped 6% after reporting quarterly results that missed on both the top and bottom lines.