news/GOOG/2023.01.20/Wall Street rallies to end higher on Alphabet, Netflix lift.txt

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)*Netflix co-founder Hastings steps down as CEO*Google parent Alphabet to lay off 12,000 workers*Goldman Sachs falls on report of probe*Dow up 1%, S&P 500 up 1.89%, Nasdaq up 2.66%Jan 20 (Reuters) - U.S. stocks rallied to close higher
on Friday, as the S&P 500 and Dow snapped a three-session losing
streak and the Nasdaq rose more than 2%, as quarterly earnings
helped lift Netflix, while Google parent Alphabet climbed after
announcing job cuts.Shares of Netflix Inc jumped 8.46% as the streaming
company added more subscribers than expected in the fourth
quarter and said co-founder Reed Hastings was stepping down as
chief executive.Netflix's quarterly report comes as the technology
and other growth-related sectors face hurdles due to the rising
interest rate path of the U.S. Federal Reserve and recession
worries that have led companies such as Microsoft Corp
and Amazon.com Inc to lay off thousands of employees.Alphabet Inc was the most recent company to
announce job cuts as it said it was cutting 12,000 jobs, sending
shares 5.34% higher.The gains sent the communication services index up
3.96% as the top performer among the 11 major S&P 500 sectors,
notching its biggest daily percentage gain since Nov. 30.High-growth sectors such as communication services were
among the worst performing in 2022 and were notably weaker in
the last few months of the year as investors gravitated towards
stocks with high dividend yields."Today’s action is probably because we had three down days
so it got into a little bit of an oversold position and they are
just doing a little bit of bargain hunting today," said Ken
Polcari, managing partner at Kace Capital Advisors in Boca
Raton, Florida."If people are viewing an opportunity, if they are getting
more comfortable with the Fed’s narrative... investors are
starting to buy into that narrative and saying 'OK that is the
way it is, let’s look at the stocks that got really beaten up'
because the market is a discounting mechanism."The Dow Jones Industrial Average rose 330.93 points,
or 1%, to 33,375.49, the S&P 500 gained 73.76 points, or
1.89%, to 3,972.61 and the Nasdaq Composite added 288.17
points, or 2.66%, to 11,140.43.For the week, the Dow lost 2.7%, the S&P 500 shed 0.66% and
the Nasdaq gained 0.55%.Comments from Federal Reserve officials have largely said
they expect interest rates to climb to at least 5% this year as
the central bank continues to try and tamp down high inflation.
On Friday, Fed Governor Christopher Waller said the central bank
may be "pretty close" to a point where rates are "sufficiently
restrictive" to cool inflation, which gave an additional boost
to equities.The Fed is largely expected to raise rates by 25 basis
points (bps) at its Feb. 1 policy announcement.Still, concerns about corporate earnings persist as the U.S.
economy shows signs of a slowdown and a possible recession.Analysts now expect year-over-year earnings from S&P 500
companies to decline 2.9% for the fourth quarter, according to
Refinitiv data, compared with a 1.6% decline in the beginning of
the year.Gains on the Dow were curbed, however, by a 2.54% fall in
shares of Goldman Sachs Group Inc after the Wall Street
Journal reported the Fed was probing the company's consumer
business.Volume on U.S. exchanges was 11.90 billion shares, compared
with the 10.87 billion average for the full session over the
last 20 trading days.Advancing issues outnumbered declining ones on the NYSE by a
3.55-to-1 ratio; on Nasdaq, a 2.63-to-1 ratio favored advancers.The S&P 500 posted one new 52-week high and four new lows;
the Nasdaq Composite recorded 77 new highs and 20 new lows.
(Reporting by Chuck Mikolajczak
Editing by Marguerita Choy)