Netflix Soars on Subscriber Growth; Tech Sector Will Outperform Financials

The technology sector is set to outperform financials. 'We're big fans of the technology sector,' said Kevin Kelly, chief investment officer at Recon Capital Partners. 'Take Netflix (NFLX) for example; they're investing in their future and not buying back shares or issuing dividends. When you look at financials, they're trying to manage their balance sheets.' Netflix shares reached an all-time high on Thursday after adding 3.27 million subscribers during second quarter. Meanwhile, rising interest rates could soften M&A activity and trading revenue for banks, which would pose headwinds for the financials sector, Kelly said. Legal expenses also remain problematic for banks. On Thursday, Goldman Sachs (GS) reported second quarter earnings of $1.98 per share. Without the $1.45 billion the investment bank paid in legal fees relating to mortgages, Goldman Sachs would have earned $4.75 a share. TheStreet's Scott Gamm has details from New York.