Dow Ends Down as Consumer Sentiment Slumps - Netflix Tumbles

Stocks finished mixed as U.S. consumer sentiment slumps and the U.S. sets another daily record for coronavirus infections.
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Stocks ended mixed Friday as U.S. consumer sentiment slumped in July and the U.S. set another daily record for coronavirus infections.

Netflix  (NFLX) - Get Report declined 6.5% to $492.99 following weak guidance on third-quarter subscriber growth.

The Dow Jones Industrial Average finished down 62 points, or 0.23%, to 26,671, and both the S&P 500 and the Nasdaq Composite gained 0.28%.

Consumer sentiment last month missed economists' forecasts, falling to 73.2 from 78.1 in June, according to the University of Michigan.

"It’s likely that the increase of virus cases across the U.S. has weighed on sentiment," said Charlie Ripley, senior investment strategist for Allianz Investment Management.

"Recently, Fed members have discussed the fragility of the current economic recovery and the latest data on consumer sentiment underscores that view. We think the disappointing consumer sentiment data provides additional evidence for Congress to act on another round of fiscal stimulus," Ripley added.

The U.S. reported more than 77,000 new coronavirus cases on Thursday and deaths in a 24-hour period rose by nearly 1,000, according to Reuters.

The New York Times put the number of new coronavirus cases at 75,600 and said it was the 11th time in the past month that the daily record had been broken.

The U.S. has 3,622,709 cases of the coronavirus, the most in the world, according to Johns Hopkins. Deaths in the U.S. have risen to 138,910, also the most in the world.

The fear on Wall Street is that rising coronavirus infections could threaten any recovery for the U.S., forcing many states to reimpose lockdowns.

Those concerns led stocks lower Thursday as data on jobs and retail pointed to an uncertain outlook for the economy as coronavirus cases across the country continued to rise. The Dow ended a four-day winning streak.

“Conditions in the labor market remain weak and the risk of mounting permanent job losses is high, especially if activity continues to be disrupted by repeated virus-related shutdowns,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

Fiscal stimulus from Washington has kept markets aloft for the past month but Democrats and Republicans disagree about the size and scope of the next virus relief package. The last stimulus measure will run out in the next few weeks.

Netflix finished down 6.5% after the streaming giant added 10.1 million new paid subscribers in the second quarter but issued third-quarter guidance short of analysts' estimates.

Netflix also said that Ted Sarandos, programming chief, was named co-CEO along with co-founder Reed Hastings. Sarandos will remain chief content officer.

Housing starts in June came in at a 1.19 million seasonally adjusted annual rate, a 17% increase from May.