Netflix Leads Index Higher After Earnings Beat

Major U.S. equities indexes moved higher on the final day of a trading week that included a series of earnings reports from key companies.

After major financial firms disclosed mostly upbeat results earlier in the week, Netflix (NFLX) took the spotlight with a strong report that could be a positive signal for the tech and communications giants set to report in the coming weeks.

On Friday, the S&P 500 added 0.4% to notch an all-time closing high. The Dow reversed morning losses to end the session nearly 0.1% higher, extending its streak of record closes to three. The Nasdaq was up 0.6%. 

Netflix shares scored the S&P 500’s top daily performance, soaring 11.1% to an all-time high following the video-streaming giant’s better-than-expected third-quarter financial results. Although the pace of subscriber additions slowed from the preceding quarters, 14% growth in total active subscribers was enough to edge out estimates. Analysts have indicated that the company’s crackdown on password-sharing has helped boost subscriber numbers, but Netflix plans to discontinue the public release of subscriber data starting in 2025.

Shares of Lamb Weston Holdings (LW) surged 10.2% after a securities filing confirmed reports that activist investor Jana Partners has acquired a stake of around 5% in the food processing company. Jana reportedly intends to encourage the maker of frozen french fries to consider the possibility of a sale as well as push for changes to its operations and capital allocation strategy.  

An upbeat earnings report also helped lift shares of Intuitive Surgical (ISRG), which jumped 10% after the provider of robotic-assisted systems for minimally invasive medical procedures topped quarterly sales and profit estimates. The company disclosed an 18% uptick in the number of procedures performed using its da Vinci surgical system. In the wake of the strong results, analysts at Piper Sandler lifted their price target on Intuitive Surgical stock to $538 from $495.

Agricultural stocks moved lower after Raymond James downgraded Canada-based grain processor Ag Growth International (AGGZF) to “market perform.” Analysts said soft crop prices and weak sentiment among farmers amounted to significant headwinds for the global agricultural industry. Shares of fellow grain handler Bunge Global (BG) dropped 6.3%, the steepest decline in the S&P 500 Friday, while peer Archer-Daniels-Midland’s (ADM) shares slide 3.8%. Ag Growth International’s American depositary receipts (ADRs) were down 10.7%.

CVS Health (CVS) shares tumbled 5.2% following the announcement that the pharmacy giant is replacing its chief executive officer (CEO). Company veteran David Joyner, most recently in charge of the firm’s pharmacy benefit manager (PBM), Caremark, is stepping into the top role, effective immediately. CVS also issued a lower-than-expected outlook for its third-quarter profit. The company is set to release its next quarterly results before the opening bell on Nov. 6.

SLB (SLB), the world’s largest oilfield services company, reported mixed third-quarter results, topping profit expectations but falling short of revenue forecasts. The company, formerly known as Schlumberger, cautioned that depressed spending by oil producers in the context of a weak oil price environment could restrain its fourth-quarter revenue growth. SLB shares lost 4.7% on Friday.