Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average posted solid gains on Friday. The Dow, the S&P 500 and the Nasdaq have closed with gains in eight of the past 10 trading sessions.
  • Tesla Inc. (TSLA)  fell 13% after the electric vehicle company said it was cutting about 7% of its workforce and warned about fourth-quarter profit.
  • Netflix Inc. (NFLX)  tumbled 4% after the streaming giant's fourth-quarter earnings topped estimates but questions lingered about its cash burn.

Wall Street Overview

Stocks rose on Friday, Jan. 18, sparked by a potential thaw in U.S.-China trade talks, despite contradictions from the Treasury, and as investors added to risky positions following a solid start to the U.S. corporate earnings season.

The Dow Jones Industrial Average jumped 336 points, or 1.38%, to 24,706, the S&P 500 rose 1.3%, and the Nasdaq gained 1%.

The Wall Street Journal reported that the United States was considering rolling back tariffs on China-made goods in an effort to ensure that ongoing trade talks bear fruit prior to their March 1 deadline. A Treasury spokesperson subsequently told CNBC, however, that no such proposal was in place, taking stocks from their session peaks Thursday.

Bloomberg, meanwhile, reported Friday that China has offered to ramp up imports from the U.S. over six years in a move that would reconfigure the relationship between the world's two largest economies. The report cited officials familiar with the negotiations. By increasing annual goods imports from the U.S. by a combined value of more than $1 trillion, China would seek to reduce its trade surplus - which last year stood at $323 billion -- to zero by 2024, one of the people told Bloomberg.

Global oil prices jumped Friday after OPEC members reported the biggest monthly drop in production in nearly two years as the cartel prepared for broader output cuts to address what it sees as a glut in world markets.

Brent crude contracts for March delivery, the global benchmark, rose 2.1% to $62.46 a barrel, while West Texas Intermediate crude contracts gained 2.7% to $53.79 a barrel.

Netflix Inc. ( NFLX) fell 4% Friday after fourth-quarter earnings at the streaming giant topped estimates and the company added 8.8 million global subscribers in the period but said that price increases in the U.S. wouldn't slow its cash burn rate until at least next year.
 
Netflix earned 30 cents a share, beating Wall Street expectations of 24 cents. Revenue of $4.19 billion missed estimates of $4.21 billion.
 
The company said it expects 8.9 million global subscribers in the first quarter, above a pre-earnings analyst consensus of 8.2 million, thanks to the success of original productions such as "Birdbox" and "Stranger Things."

However, Netflix's recent price increases in the U.S., which will add nearly $1 billion to 2019 revenue, haven't changed the company's cash burn estimate, which remains at negative $3 billion - after a negative $1.3 billion rate over the fourth quarter - even though operating margins will improve to around 13%. That could prove difficult for a company that's facing increased competition from the likes of Walt Disney Co. (DIS) , AT&T Inc. (T) , Apple Inc. (AAPL) and Amazon.com Inc. (AMZN) .

Tesla Inc. (TSLA)  declined 13% after the electric vehicle company said it would about 7% of its workforce, and added that fourth-quarter profit likely will be lower than the previous three-month period.

"We unfortunately have no choice but to reduce full-time employee headcount by approximately 7% (we grew by 30% last year, which is more than we can support) and retain only the most critical temps and contractors," CEO Elon Musk said in a statement posted to the company's website. "Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months. Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220 mile), standard interior Model 3 at $35k and still be a viable company. There isn't any other way."

Tesla said it will post a GAAP-reported profit for the three months ended in December, but cautioned that number will be less than the $312 million it posted for the third quarter. It also said it would ramp up Model 3 production ahead of a scheduled reduction in U.S. tax credits on July 1.

Shares of American Express Co. (AXP)  turned up 1.3% after the credit card company posted adjusted earnings of $1.74 a share, missing estimates of $1.80.

Net income in the period was $2.32 a share, compared with a year-earlier loss of $1.42 a share, when the company recorded a charge because of changes to U.S. tax laws. Revenue of $10.47 billion also came in light, below forecasts of $10.58 billion.

AmEx said expenses in the quarter rose 9% as it added perks to its reward programs. 

The company said it expects revenue growth in 2019 of between 8% and 10%, while it forecasts adjusted earnings of $7.85 to $8.35 a share.

Schlumberger NV (SLB)  posted stronger-than-expected fourth-quarter revenue and declared a dividend of 50 cents a share even as it cautioned that recent oil price volatility has added more uncertainty into its 2019 outlook.

Schlumberger said adjusted earnings for the three months ended in December were 36 cents a share, matching analysts' estimates. Revenue slowed 4% from the previous quarter to $8.2 billion but beat Wall Street estimates of $8.04 billion.

The stock rose 8.6%.

Schlumberger is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stock? Learn more now.