NEW YORK (CBS/AP) — Companies that do the best when the economy is improving led the market higher Tuesday after several of them reported strong quarterly earnings. That’s a change from earlier this year.
Los Gatos-based Netflix, which streams TV shows and movies over the Internet, was among the winners after announcing profits that impressed investors. Netflix soared $42.62, or 24 percent, to $216.99 after reporting a big gain in subscribers in the first quarter.
The stock market’s surge in 2013 has been led by so-called defensive industries such as health care, consumer staples and utilities. Investors buy those stocks when they’re unsure about the direction of the economy and want to own companies that make products people buy in bad times as well as good. Until now, they’ve been less enthusiastic about stocks of companies that provide discretionary goods and services and do best in good times.
“For a change we are actually seeing more cyclical parts of the economy lead the market,” said Michael Sheldon, chief market strategist at RDM Financial Group.
The Dow closed up 152.29 points at 14,719.46. The S&P 500 ended 16.28 points higher at 1,578.78. Both indexes are about 1 percent below their record highs. The Nasdaq composite rose 35.78 points, or 1 percent, to 3,269.33.
Stocks closed higher even after financial markets were shaken in the early afternoon when a fake tweet on The Associated Press Twitter account that there had been explosions at the White House prompted a sudden sell-off.
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