The Nasdaq composite closed at a record high on Tuesday after Netflix shares surged on stronger-than-expected subscriber growth.
The video streaming giant said Monday after the close that total net adds reached 8.33 million, well above a StreetAccount estimate of 6.39 million. Netflix‘s stock surged 10 percent, lifting the company’s market cap above $100 billion for the first time.
The Nasdaq finished 0.7 percent higher at 7,460.29.
The S&P 500 also closed at an all-time high, climbing 0.2 percent to 2,839.13, as the corporate earnings season continued. The Dow Jones industrial average hit an intraday record, before closing 3.79 points lower at 26,210.81.
Dow components Johnson & Johnson, Procter & Gamble and Travelers Cos. all reported better-than-expected earnings and revenue on Tuesday. Verizon, another Dow component, posted a profit that missed expectations, while sales surpassed analyst estimates.
“Stocks will continue to benefit from the earnings driven bull market that we have experienced over the past 18 months both in the U.S. and abroad,” said Marc Chaikin, CEO of Chaikin Analytics. Thus far, stocks have responded positively to quarterly results, Chaikin added.
The calendar fourth-quarter earnings season is off to a good start. As of Tuesday, 76 percent of the S&P 500 companies that had reported surpassed earnings expectations, while 84 percent of those companies had beaten sales estimates, according to Thomson Reuters I/B/E/S.
Ed Yardeni, president and chief investment strategist at Yardeni Research, said in a note forward earnings are also on the rise. “Momentum remains strong, as the yearly change in forward earnings is up from six-year lows in early 2016 and should accelerate in 2018,” he said.
Wall Street also looked to Washington as a three-day government shutdown concluded. During Monday’s session, members of the Senate managed to secure a temporary arrangement to keep the U.S. government open until February 8. The vote propelled the Dow, S&P 500 and Nasdaq composite to all-time highs.
The chamber passed a stopgap bill by a margin of 81-18. Members of the House later passed the bill, which was signed by President Donald Trump.
John Augustine, chief investment officer at Huntington Private Bank, said the market viewed the shutdown “as a politics issue, not an economic issue.”
Equities are off to a strong start for the year, with the three major indexes rising at least 6 percent in January. Stocks are building on the strong gains made in 2017.
The stock market’s rise may not be over either, according to Bridgewater Associates founder Ray Dalio. In an interview with CNBC, Dalio said the U.S. tax-code changes could lead to big gains in equities. “There is a lot of cash on the sidelines. … We’re going to be inundated with cash,” he said. “If you’re holding cash, you’re going to feel pretty stupid.”
Elsewhere, shares of Whirlpool jumped 3.2 percent after Trump approved a 20 percent tariff on the first 1.2 million imported large residential washing machines in the first year and a 50 percent tariff on machines above that number.