Friday's Market Minute: Tech Rotation Dampens NASDAQ's Week

While Netflix Inc NFLX has entrenched itself an established NASDAQ leader, its yearlong outlook took a hit Thursday as earnings season continues. The company’s 10 million new users in the second quarter were better than the 8.3 million expected, but Netflix only expects to add 2.5 million next quarter. A CEO transition is also occurring at Netflix as Ted Sarandos was promoted to co-CEO alongside longtime boss Reed Hastings. A stock’s outlook is important in these volatile times, as the market’s behavior has been tied closely to virus concerns. The rotation out of tech stocks is also concerning for Netflix as an industry leader.

The NASDAQ Composite lost 0.7% in its regular session as laggards like airlines and energy sectors attracted investors. While the index has not posted consecutive daily losses in two months, the streak could end Friday as bears rush to react to Netflix’s underwhelming outlook. While two days of losses in a row do not doom the NASDAQ, tech’s quarantine dominance is displaying early signs of declining.

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