Tech and consumer-focused companies lead stocks higher; Netflix leaps

Technology and consumer-focused companies led U.S. stocks to more records Tuesday. Netflix, at the center of both groups, soared after saying it gained more than 8 million subscribers at the end of 2017.

Bond prices rose and yields fell after the Bank of Japan said it isn’t cutting back its stimulus programs. Yields had reached longtime highs, and the decline helped high-dividend companies such as utilities and real estate investment trusts. Healthcare and household goods companies fell after Johnson & Johnson and Procter & Gamble gave disappointing quarterly reports.

U.S. solar power companies surged after President Trump approved tariffs on imported solar-energy components. Some investors were relieved: analysts said the tariffs will make production more expensive for U.S. companies, but they weren’t as harsh as they could have been. Companies that do their manufacturing overseas fell, and some of the U.S. companies gave up their gains before trading ended.

“You could probably argue that this particular tariff is the first implementation of the protectionist rhetoric than he ran on,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab. That didn’t worry investors much, but Frederick said stocks might decline if there are signs other countries are retaliating or that the administration is preparing to take more aggressive steps.

The Standard & Poor’s 500 index rose 6.16 points to 2,839.13. The Dow Jones industrial average edged down 3.79 points to 26,210.81, hurt by Johnson & Johnson and Procter & Gamble’s losses. The Nasdaq composite jumped 52.26 points to 7,460.29. The Russell 2000 index of smaller-company stocks rose 5.54 points to 1,610.71.

Netflix soared 10% to $250.29 after the streaming video company said it picked up 8.3 million subscribers in the fourth quarter, much more than the company and analysts expected.

Big technology companies also rallied. Facebook rose 2.1% to $189.35. Alphabet, Google’s parent company, rose 1% to $1,176.17. Online retailer Amazon climbed 2.7% to $1,362.54.

The tariff on imported solar-energy components will start at 30%, and it’s aimed at cheaper imports from places such as South Korea and China. The latter country called the measures an abuse of trade remedies.

Raymond James analyst Pavel Molchanov said that the extra costs from the tariffs will stop some projects from being built, but that solar power capacity in the U.S. should keep growing at a rapid pace over the next few years.

First Solar rose as much as 8.6% before turning lower; it closed down 0.7% at $68.48. SunPower was up 6.8% early on, then fell; it closed down 6.4% at $8.16. Sunrun, however, finished the day up 6.1% at $6.41. JinkoSolar Holdings sank 7.9% to $21.52, and Canadian Solar slipped 0.8% to $15.64.

The Trump administration also placed a tariff of 50% on large washing machines and some components. Whirlpool shares climbed 3.2% to $171.98.

Johnson & Johnson dropped 4.3% to $141.83 after the healthcare giant said sharply higher spending canceled out a big jump in sales. A federal appeals court also ruled against Johnson & Johnson, saying a patent on its rheumatoid arthritis drug Remicade isn’t valid. Remicade is its biggest-selling drug, and the ruling could lead to increased competition.

Tide detergent maker Procter & Gamble slid 3.1%, to $89.05. The company reported a bigger profit and better sales than Wall Street expected, but analysts said its profit margins were weak.

Kimberly-Clark Corp. edged up 0.8% 93 cents to $117.84 after the maker of Huggies diapers and Kleenex tissues said it will cut 5,000 to 5,500 jobs to reduce costs.

Bond prices turned higher. The yield on the 10-year Treasury note fell to 2.62% from 2.66%. For the last few days, the 10-year yield has been at its highest level since September 2014.

Benchmark U.S. crude climbed 90 cents, or 1.4%, to $64.47 a barrel. Brent crude, used to price international oils, rose 93 cents, or 1.3%, to $69.96 a barrel.

Wholesale gasoline rose 3 cents to $1.91 a gallon. Heating oil rose 3 cents to $2.09 a gallon. Natural gas jumped 22 cents, or 6.8%, to $3.44 per 1,000 cubic feet.

Gold rose $4.80 to $1,336.70 an ounce. Silver fell 8 cents to $16.91 an ounce. Copper fell 9 cents to $3.11 a pound.

The dollar slid to 110.30 yen from 110.99 yen. The euro rose to $1.2294 from $1.2258.

The International Monetary Fund estimated that the world economy expanded at a 3.7% annual pace last year, the fastest since 2011, and said it believes growth will accelerate to 3.9% in 2018-19. The IMF noted surprisingly strong growth in Europe and Asia and predicted that U.S. tax cuts will give the American economy a short-term boost.

Germany’s DAX climbed 0.7%. The British FTSE 100 rose 0.2%. France’s CAC 40 fell 0.1%.

Asian stock indexes rose after the Bank of Japan said it will continue making massive asset purchases and using negative interest rates to spur inflation. Japan’s benchmark Nikkei 225 index advanced 1.3%. South Korea’s Kospi climbed 1.4%. Hong Kong’s Hang Seng jumped 1.7%.

UPDATES:

2:40 p.m.: This article was updated with closing prices, context and analyst comment.

This article was originally published at 7 a.m.