Good Start for Wall Street
U.S. stocks ended with solid gains in a lightly traded session on Monday. Worries over Syria faded and was replace by optimism as the first-quarter earnings season is expected to heat-up in the days ahead.
The Dow Jones Industrial Average rose 212.90 points (+0.9%) with 25 of the 30 blue-chip stocks ending in positive territory. The tech-heavy Nasdaq Composite Index rose 49.63 points (+0.7%) while the S&P 500 index added 21.54 points (+0.8%). Market gains were broad-based with all the 11 primary sectors of the ending higher, 8 of which rising at least 1%.
Netflix Reports Record-Breaking Feat
Netflix, Inc. (NFLX) took the cudgels for the esteemed group of FAANG stocks with a fantastic quarterly earnings report on Monday. Not only the investors but the video-streaming giant itself was surprised by the record-breaking feat.
Although their earnings and revenue for the first three months of 2018 were slightly better-than-expected, the growth in subscribers is unprecedented. NFLX’s first-quarter results showed the demand for video-streaming services is ongoing and growth seems unstoppable. NFLX has now reached 125 million people worldwide.
About 1.96 million net U.S. streaming subscribers were added plus 5.46 million international subscribers as of March 31, 2018. Netflix’s total net gain of 7.4 million subscribers in the 1st quarter bested its previous guidance of 6.35 million by a remarkable one million subscribers.
U.S. Imposes Ban on Sales to China’s ZTE
Chinese telecom equipment maker ZTE was caught was caught illegally shipping goods to Iran. For breaking the terms of an agreement reached with the U.S. last year, the U.S. Department of Commerce immediately slapped a seven-year ban on sales to ZTE on Monday.
With the ban, Qualcomm Inc. (QCOM), an American firm and major supplier of chips for ZTE’s phones will be gravely affected. The company’s products account for the lion’s share of chips inside ZTE smartphones. Qualcomm posted sales of $22 billion last year but is likely to start losing business due to this latest ban.
Tesla Halts Model 3 Production
The production of the Model 3 assembly line has been suspended temporarily. Tesla Inc. (TSLA) said on Monday that the move was a planned production pause.
A Tesla representative said, “These periods are used to improve automation and systematically address bottlenecks in order to increase production rates.” Based on BuzzFeed report, workers at the plant were expected to use vacation days or stay home without pay during the four- to five-day production pause.
Facebook Faces New Problem
A class action suit on facial recognition might be added to Facebook Inc.’s (FB) On Monday, U.S. District Judge James Donato ruled in San Francisco federal court that the social media giant must face a class action lawsuit alleging that it unlawfully used a facial recognition process on photos without user permission.
This new ruling would compound the privacy issues against Facebook following the data breach scandal involving political consultancy firm Cambridge Analytica. The U.S. District Judge said that a class action was the most efficient way to resolve the dispute over facial templates. Facebook, while reviewing the ruling argued that, “We continue to believe the case has no merit and will defend ourselves vigorously.”