Stocks rise as investors shrug off big Netflix disappointment, Dow gains 200 points

Stocks rose on Wednesday as investors digested disappointing Netflix earnings along with a host of other corporate reports.

The Dow Jones Industrial Average was up 225 points, or 0.6%. The S&P 500 rose 0.4%, and the Nasdaq Composite advanced 0.3%.

The moves came despite Netflix posting a 29% loss in its share price in premarket trading, after reporting a loss of 200,000 subscribers in the first quarter. The news led shares of streaming companies Disney, Roku, Warner Bros. Discovery and Paramount to fall, as investors and could further worry investors about buying technology stocks ahead of earnings. A slew of analysts also slashed their ratings on Netflix following its first-quarter results.

Meanwhile, Procter & Gamble’s better-than-expected results sent the stock up about 1%. Procter also hiked its full-year revenue guidance. Shares of IBM, another Dow component, rose more than 1% following a beat on earnings and revenue.

“From a technical perspective, the S&P 500 held the important 4400 support level on the S&P 500 (which was the top of the late March rally). Investors are also encouraged by a slight dip in the 10-year yield and the gradual upward revisions to Q1 EPS growth expectations for the market and six of its 11 sectors (the S&P 500 is now seen posting a 5.2% rise vs the earlier estimate of 4.4%). I think the market will now undergo a short-term rally.”

Tesla and United Airlines are slated to report after the bell.

Beyond company earnings, investors were also keeping a close eye on the 10-year U.S. Treasury yield, which retreated Wednesday after touching 2.94%, its highest level since late 2018, on Tuesday.

All the major averages saw strong gains on Tuesday, posting their best day since March 16. The Nasdaq Composite bounced back 2.15%, while the Dow Jones Industrial Average rose 499.51 points, or 1.45% and the S&P 500 gained 1.61%.

Tuesday’s stock market rally was broad-based with 10 out of 11 sectors ending the session in the positive, led by consumer discretionary. Some of the biggest gains came from Microsoft and Alphabet, which rose 1.7% and 1.8%, respectively, while airline stocks jumped after TSA lifted mask mandates on planes in response to a Florida court ruling.

Meanwhile, oil prices fell about 5% after the International Monetary Fund cut its economic growth forecasts and warned of risks from higher inflation.

“I just think today we’re in a market where different things are shining,” Ally Invest’s Lindsey Bell told CNBC’s “Closing Bell” on Tuesday. “We’ve got a great earnings season so far and today the market is focusing on that. They’re focusing on the VIX that’s coming down and of course, oil prices — the fall in oil prices helps the inflationary story.”