Nasdaq boosted by growth stocks after Netflix's upbeat forecast By Reuters

2/2© Reuters. FILE PHOTO: A Wall Street sign is International foreign exchange trader querypictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri2/2

By Shreyashi Sanyal

(Reuters) - The Nasdaq rose on Wednesday after a positive forecast from Netflix added to a largely upbeat second-quarter earnings from U.S. companies against the backdrop of rising recession fears from the Federal Reserve's efforts to tame surging inflation.

Netflix Inc (NASDAQ:NFLX)'s shares gained 3% after the company predicted it would return to customer growth during the third quarter, while posting a smaller-than-forecast 1 million drop in subscribers in the second quarter.

The forecast from the streaming service provider helped other high-growth stocks extend gains. Shares of Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN), Microsoft Corp (NASDAQ:MSFT) and Meta Platforms Inc added between 0.3% and 2%.

"Right now, investors seem more willing to reward than to punish because there's already a lot of pessimism baked into trader sentiment," said Steve Sosnick, chief strategist at Interactive Brokers (NASDAQ:IBKR).

"We've been selling the rumor. If companies can put out some decent results that could get people to be more willing to buy than to sell."

Electric-vehicle maker Tesla (NASDAQ:TSLA) Inc slipped 0.3% ahead of its earnings report after market close.

Analysts expect aggregate year-on-year S&P 500 profit to grow 5.9% in this reporting season, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data.

Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed's upcoming meeting next week, until some policymakers signaled a 75-basis-point increase.

At 10:00 a.m. ET, the Dow Jones Industrial Average was down 122.60 points, or 0.39%, at 31,704.45, while the S&P 500 was down 9.92 points, or 0.25%, at 3,926.77. The Nasdaq Composite was up 17.22 points, or 0.15%, at 11,730.37.

Trading remained volatile in thin volumes.

Merck & Co Inc dropped 0.9% as the company's cancer therapy Keytruda failed to meet the main goal of a late-stage trial testing it in patients with head and neck cancer.

Baker Hughes Co plunged 10.1% as the oilfield services provider reported a bigger second-quarter loss, while its adjusted profit also missed estimates.

Declining issues outnumbered advancers for a 1.19-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.65-to-1 ratio on the Nasdaq. The S&P index recorded one new 52-week high and 29 new lows, while the Nasdaq recorded 17 new highs and 11 new lows.

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