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Netflix Is Rebounding and Taking Tech With It

Megacap tech peers Amazon, Facebook and Alphabet all touched their record highs during the trading session.

Netflix Is Rebounding and Taking Tech With It
The Netflix Inc. app is demonstrated for a photograph on an Apple Inc. iPad mini tablet computer in Tiskilwa, Illinois, U.S. (Photographer: Daniel Acker/Bloomberg)

(Bloomberg) -- Netflix Inc. shares pared their worst drop in two years, regaining a 50-day moving average seen as a key support level for the stock.

Shares of the streaming-video provider fell 5.8 percent to $377.45 at 12:03 p.m. in New York, after earlier declining as much as 14 percent after a disappointing second-quarter earnings report. The 50-day moving average is about $370.74, and the stock hasn’t closed below that threshold since early April.

Netflix Is Rebounding and Taking Tech With It

“For those who wanted an entry point, here it is,” Bernstein analyst Todd Juenger said in an earlier note to clients. Netflix is still the second-best performer in the S&P 500 Index this year with a 98 percent gain, trailing only medical-device maker Abiomed Inc.

Options traders were in no rush to hedge against potential losses in Netflix shares going into the earnings release Monday afternoon. The cost of protecting against a 10 percent drop in the stock fell to the lowest level since February, data compiled by Bloomberg show.

Netflix Is Rebounding and Taking Tech With It

The Netflix rebound came amid a broader rally in tech stocks. Megacap tech peers Amazon.com Inc., Facebook Inc. and Alphabet Inc. Are all trading at record highs Tuesday, along with the Nasdaq Composite Index.

To contact the reporters on this story: Kamaron Leach in New York at kleach6@bloomberg.net;Elena Popina in New York at epopina@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Richard Richtmyer

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