Nasdaq hits record on Netflix boost; Dow dragged by Goldman

"A lot of the expectation for a recovery in earnings is predicated on oil prices being around $47-$50 a barrel," said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, New York. "So if you don't get those numbers, you don't get the strong earnings the stock market needs. This is not trivial stuff. It creates a lot of uncertainty and volatility in forecasts."

NEW YORK: A Netflix rally boosted the Nasdaq Composite to a record high on Tuesday while Goldman Sachs Group Inc dragged the Dow lower as earnings take center stage on Wall Street.

The Nasdaq posted its eighth consecutive session of gains, the longest streak since its 10-day string in February 2015.

The tech-heavy index was largely boosted by Netflix . The movie streaming company rose 13.5 percent to $183.60 a day after it crushed Wall Street forecasts by reporting 5.2 million new streaming customers in the second quarter.

As the second-quarter earnings season gears up, investors will put most of their focus on the performance of individual companies, analysts said.

"Earnings and guidance will move the market more than news out of D.C. Goldman is more important to the market today, as is Netflix, and that will be the case for the next couple of weeks," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

The Dow was dragged lower by a drop in Goldman Sachs, which fell 2.6 percent to $223.31 after reporting a 40 percent fall in bond trading revenue and posted the weakest commodities results in its history as a public company.

Other widely held stocks were active after posting results.

Johnson & Johnson gained 1.7 percent to $134.46 after saying expected sales growth to pick up in the second half of the year.

Harley-Davidson Inc fell 5.9 percent to $48.95 after the motorcycle maker cut its forecast for 2017 shipments.

Analysts estimate an 8.5 percent rise in second-quarter earnings and a 4.7 percent increase in revenue for S&P 500 companies from a year earlier.

This follows a robust first quarter when U.S. companies posted the fastest rate of growth in earnings since 2011, according to Thomson Reuters I/B/E/S.

The Dow Jones Industrial Average fell 54.99 points, or 0.25 percent, to 21,574.73, the S&P 500 gained 1.47 points, or 0.06 percent, to 2,460.61 and the Nasdaq Composite added 29.87 points, or 0.47 percent, to 6,344.31.

Both the Nasdaq and the S&P 500 set record closing highs.

The CBOE Volatility index <.VIX> ticked up to end at 9.89 on its fourth consecutive close below 10.

U.S. Senate Republicans failed to muster enough votes to repeal the Affordable Care Act, commonly known as Obamacare, but reaction was muted in the stock market. Analysts said the expectation for business-friendly legislation out of Washington is all but priced out of equities.

"Investors are looking for an investment that doesn't need the economy to do a lot better, and (where) it doesn't need Washington," said Matthew Peterson, chief wealth strategist for LPL Financial.

Technology <.SPLRCT> was the largest percentage gainer among the 11 S&P 500 sectors. Healthcare <.SPXHC> ended up less than 0.1 percent.

Despite the muted reaction from stocks, news of the healthcare bill's collapse sent the U.S. dollar to a 10-month low against a basket of major currencies <.DXY>.

Chipotle Mexican Grill Inc was down 4.3 percent at $374.98 after it closed a restaurant in Virginia due to a suspected norovirus outbreak among some diners.

Declining issues outnumbered advancing ones on the NYSE by a 1.10-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored decliners.

About 5.70 billion shares changed hands in U.S. exchanges, compared with the 6.48 billion daily average over the last 20 sessions. - Reuters