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May 28, 2020, 7:21 a.m. EDT

Netflix’s stock turns higher, snaps longest losing streak in nearly 10 months

Netflix rises for the first time since it closed at a record seven sessions ago, on the day that rival HBO Max launches

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By Tomi Kilgore, MarketWatch


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Shares of Netflix Inc. pulled an intraday U-turn to close higher Wednesday, snapping the longest-losing streak in nearly 10 months, and bucking the launch of the rival HBO Max service and the recent rotation away from COVID-19 beneficiaries.

Netflix’s stock /zigman2/quotes/202353025/composite NFLX +8.07%  dropped as much as 4.1% to an intraday low of $397.86, the first peak below the $400 mark since April 29, before starting its bounce. The stock closed up 1.2% at $419.89, to snap a six-session losing streak. The stock had lost 8.7% during the streak, which began after it closed at a record $454.19 on May 15.

The six-day streak of losses was the longest since the six-day stretch ended Aug. 5, 2019.

Helping provide a boost to shares was the second-straight day of sharp gains in the broader market, on growing optimism over the easing of COVID-19-related lockdown measures. The S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.05%  rose 1.5%, after gaining 1.2% on Tuesday, while the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.44%  jumped 553 points to bring its two-day total to 1,083 points. See Market Snapshot.

Meanwhile, shares of AT&T Inc. /zigman2/quotes/203165245/composite T +2.00%  , the parent of HBO Max, rallied 3.3% and has gained 10.0% amid a five-day win streak. HBO Max launches Wednesday with a monthly subscription price of $14.99 for non-AT&T customers, compared with Netflix’s “Standard” plan of $12.99 a month.

Don’t miss : Here’s everything coming to HBO Max in June 2020.


FactSet, MarketWatch

Netflix’s stock had been on a tear before the losing streak began. From the March closing low of $298.84 on March 16 to the May 15 record, the stock had rocketed 52.0%, to add over $68.3 billion to its market capitalization, as the company was viewed by investors as a beneficiary of stay-at-home measures implemented to slow the spread of the COVID-19 virus.

The stock handily outperformed its large-cap technology peers and the broader market over that time, as the tech-heavy Nasdaq-100 index /zigman2/quotes/210598364/realtime NDX +0.76%  rose 30.4% and the S&P 500 gained 20.0%.

Last week, Benchmark analyst Matthew Harrigan reiterated his sell rating on Netflix, saying he believed the stock was “quite vulnerable” to any market rotation out of COVID-19 safe-haven names. At that time, he wrote in a note to clients that the imminent launch of HBO Max, and the broad launch of Comcast Corp.’s /zigman2/quotes/209472081/composite CMCSA +3.11%  Peacock service in July, “could also curb the market’s rampant enthusiasm, as might the creeping return of live sports as a viewing alternative.”

/zigman2/quotes/202353025/composite NFLX 548.73, +40.97, +8.07%

Meanwhile, other “highflying ‘shelter-in-place’ names” have seen momentum wane recently, as investors have started rotating into more cyclical areas as COVID-19 related restrictions ease, as MarketWatch’s Steve Goldstein reported in Wednesday’s “Need to Know,” which sourced Julian Emanuel, BTIG’s chief equity and derivatives strategist.

Amazon.com Inc.’s stock /zigman2/quotes/210331248/composite AMZN +0.55%  fell as much as 3.8% in intraday trading Wednesday before paring losses to close down 0.5%. It has shed 3.5% amid a four-day run of losses. The current losing streak snapped a six-day stretch of gains that ended with a record close of $2,497.94 on May 20, which was 47.9% above its May 16 close of $1,689.15.

Another other COVID-19 highfliers that reached record highs in the past week, shares of Zoom Video Communications Inc. /zigman2/quotes/211319643/composite ZM +2.36%  slumped 1.2% and suffered a fourth straight decline and Nvidia Corp. /zigman2/quotes/200467500/composite NVDA -0.28%  sank 2.2% after falling 3.4% on Tuesday.

/zigman2/quotes/202353025/composite
US : U.S.: Nasdaq
$ 548.73
+40.97 +8.07%
Volume: 21.61M
July 10, 2020 4:00p
P/E Ratio
111.06
Dividend Yield
N/A
Market Cap
$223.31 billion
Rev. per Employee
$2.22M
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/zigman2/quotes/210599714/realtime
US : S&P US
3,185.04
+32.99 +1.05%
Volume: 2.41B
July 10, 2020 5:09p
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
26,075.30
+369.21 +1.44%
Volume: 337.36M
July 10, 2020 5:09p
loading...
/zigman2/quotes/203165245/composite
US : U.S.: NYSE
$ 30.13
+0.59 +2.00%
Volume: 36.89M
July 10, 2020 4:04p
P/E Ratio
15.25
Dividend Yield
6.90%
Market Cap
$210.47 billion
Rev. per Employee
$637,332
loading...
/zigman2/quotes/210598364/realtime
US : U.S.: Nasdaq
10,836.33
+81.74 +0.76%
Volume: 673,904
July 10, 2020 5:16p
loading...
/zigman2/quotes/209472081/composite
US : U.S.: Nasdaq
$ 40.51
+1.22 +3.11%
Volume: 19.03M
July 10, 2020 4:00p
P/E Ratio
16.05
Dividend Yield
2.27%
Market Cap
$179.33 billion
Rev. per Employee
$513,625
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 3,200.00
+17.37 +0.55%
Volume: 5.49M
July 10, 2020 4:00p
P/E Ratio
152.86
Dividend Yield
N/A
Market Cap
$1587.42 billion
Rev. per Employee
$359,671
loading...
/zigman2/quotes/211319643/composite
US : U.S.: Nasdaq
$ 275.87
+6.35 +2.36%
Volume: 6.35M
July 10, 2020 4:00p
P/E Ratio
1,603
Dividend Yield
N/A
Market Cap
$76.03 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/200467500/composite
US : U.S.: Nasdaq
$ 419.17
-1.19 -0.28%
Volume: 12.44M
July 10, 2020 4:00p
P/E Ratio
78.28
Dividend Yield
0.15%
Market Cap
$258.52 billion
Rev. per Employee
$882,428
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Tomi Kilgore is MarketWatch's deputy investing and corporate news editor and is based in New York. You can follow him on Twitter @TomiKilgore.

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