On Tuesday, after a volatile trading session, U.S. stocks gained marginally. This was led by advances in the technology sector. The intraday volatility was in response to investor uncertainty regarding the European Central Bank and its ability to effectively combat deflation. Investors are expecting the ECB to announce a government-bond-buying program at their next meeting on Thursday. Meanwhile, according to the National Association of Home Builders/Wells Fargo on Tuesday, the data economic news which measures the home builder confidence, ticked down by one point this month to fifty seven. Any reading above 50 is a clear signal that builders are optimistic regarding sales. At the close of U.S. trading, the Dow Jones Industrial Average (DJIA) advanced 3.66 points to 17,515.23 while the S&P 500 index (SPX) also advanced 3.13 points to 2,022.55. Following the upward trend was the Nasdaq Composite index (COMP) which added 20.46 points to 4,654.85 as a result of Apple Inc. (AAPL, +2.58%) shares gaining 2.6 percent.
On Tuesday, the U.S. dollar (USD) traded at a twelve-year high against other major currencies. This came in response to a move by the International Monetary Fund (IMF) who cut their global economic growth forecast in 2015 while the weak economic growth data released in China negatively impacted investor confidence. In its World Economic Outlook report, the IMF projected global growth in 2015 at 3.5 percent and at 3.7 percent in 2016; this was a drop of 0.3 percentage points for both years. Despite this, the IMF did raise its outlook for growth in the U.S. The EUR/USD traded at 1.1575, down 0.25 percent while the greenback traded higher against the British pound with GBP/USD trading at 1.5185, down 0.48 percent. Against the Japanese yen, the USD traded at a 1-week high of 118.45, up 0.74% while the USD/CAD also advanced 1.4% to trade at 1.2110, a five-year high.
In after-hours trading on Monday, the shares of Netflix (NFLX, +3.40%) surged, advancing more than 12 percent. This increase came in response to the fourth-quarter profit which was well above analyst expectations. To top it off, the video streaming service also provided a positive outlook for net subscriber additions. According to their report, the net earnings for Netflix rose from 79 cents a share or from $48.4 million a year earlier to $1.35 a share or $83.4 million for the quarter ending on the 31st of December 2014. Furthermore, the adjusted earnings per share, which does not include non-recurring items, were 72 cents. This was way above analysts’ expectations of 45 cents. Also on the upside was Netflix’s revenue which rose from $1.175 billion to $1.485 billion which matched estimates. The net subscriber additions also impressed and totaled over 4.3 million in the fourth quarter, much higher than analysts’ expectations for an increase of only 3.876 million. Netflix is also hoping to add over 4.05 million new subscribers during the first quarter of 2015 which will also top analyst expectations at 3.874 million. While Netflix stocks have declined 2.9 percent since Monday, their shares are currently trading at $248.80 a share.
With the focus on U.S. supplies data expected out today, crude oil prices eased on Wednesday in early Asian trading. Due to the public holiday in the U.S. on Monday, the American Petroleum Institute will release its estimates of last week’s stockpiles of U.S. refined products and crude oil today. On Tuesday, West Texas Intermediate oil futures sold off sharply in response to the cut of the global economic growth outlook by the IMF. Brent oil for March delivery also traded at $47.97 a barrel, down 1.79%, or 0.88 cents. On Wednesday, crude oil for delivery in March declined 0.07 percent to trade at $46.64 a barrel on the NYMEX.