Netflix (NFLX) shares slid as much as 5% in after-hours trading before quickly recovering as investors digested quarterly results from the streaming giant.

Yahoo Finance's Alexandra Canal reports:

Revenue beat Bloomberg consensus estimates of $9.53 billion to hit $9.56 billion in Q2, an increase of 16.8% compared to the same period last year, as the streamer continued to lean on revenue initiatives like its crackdown on password sharing and ad-supported tier, in addition to last year's price hikes on certain subscription plans.

But Netflix guided to third quarter revenue of $9.73 billion, a miss compared to consensus estimates of $9.83 billion.

Diluted earnings per share (EPS) also beat estimates in the quarter, with the company reporting EPS of $4.88, above consensus expectations of $4.74 and well ahead of the $3.29 EPS figure it reported in the year-ago period. Netflix guided to third quarter EPS of $5.10 ahead of consensus calls for $4.74.

Subscribers also came in strong with another 8 million-plus subscribers added on the heels of key programming like the latest season of "Bridgerton."

Subscriber additions of 8.05 million beat expectations of 4.7 million and follows the 9.3 million net additions the streamer added in the first quarter. The company had added 5.9 million paying users in Q2 2023.

Leading up to the earnings release, Netflix's stock has been on a tear, with shares up more than 30% since the start of the year.

Tech stocks failed to make a comeback on Thursday following the Nasdaq's worst day since 2022 while the broadening of the stock market rally also hit a pause.

The tech-heavy Nasdaq Composite (^IXIC) erased earlier gains to fall more than 0.7%, while the S&P 500 (^GSPC) fell 0.8%. The Dow Jones Industrial Average (^DJI) slipped more than 1%, or about 550 points, following an all-time closing record for the blue-chip index in the prior session.

The Nasdaq is now down more than 2% over the past five days.

Meanwhile, the small-cap Russell 2000 (^RUT) index, which had recently been on a historic rip higher, fell nearly 2% on the day.

In the midst of the Nasdaq's (^IXIC) continuing rut on Thursday, can Netflix (NFLX) save the day?

The streaming giant will kick off the start of Big Tech earnings, set to report second quarter results after the bell.

Here's what Wall Street expects from the report, according to Bloomberg consensus estimates:

• Revenue: $9.53 billion (Netflix's guidance: $9.49 billion) vs. $8.19 billion in Q2 2023

• Earnings per share (EPS): $4.74 (Netflix's guidance: $4.68) vs. $3.29 in Q2 2023

• Net subscriber additions: 4.7 million vs. 5.9 million in Q2 2023

The streamer will once again have a high bar to overcome as the stock flirts with record highs.

"For NFLX shares, much is priced in but we remain bullish given the still large opportunity for growth ahead," Morgan Stanley analyst Benjamin Swinburne wrote in a note ahead of the report.

Investors have praised the company's foray into sports and live events. Meanwhile, its ad tier continues to gain traction. Shares have soared as a result, with the stock up about 33% since the start of the year.

At Wednesday's close, Netflix traded at $647.46 per share and was little changed prior to its results on Thursday. Shares closed at a record high of $691.69 on Nov. 17, 2021.

But the stock's recent run-up has led to some apprehension on Wall Street.

"We are cautious heading into the firm’s Q2 2024 release," Citi analyst Jason Bazinet wrote. "We maintain our Neutral rating and $660 target price."

In May, Netflix announced it won the streaming rights to two NFL games set to air on Christmas Day as part of a three-season deal. The company also told advertisers at its May Upfront presentation that its ad tier has reached 40 million global monthly active users — a significant jump from the 15 million users the company revealed back in November and a 35 million-user increase compared to the year-ago period.

The growth comes as the streamer has raised the prices of its ad-free subscriptions in an attempt to lure more users to its ad-supported offering. Netflix's password-sharing crackdown has also lifted top-line growth and increased the platform's overall subscriber base, with another 9 million-plus users added in the first quarter.

But it hasn't been an entirely smooth trajectory upward. In April, Netflix said it would stop reporting subscriber figures at the start of next year, raising concerns about its long-term subscriber growth and sending shares tumbling.

Read more here.

DR Horton (DHI) stock jumped 10% to an all-time high after the homebuilder reported fiscal third quarter earnings per share that beat estimates and announced new share buybacks.

The stock hit an intraday record of $177.47 and had pared gains slightly in the afternoon.

The Texas-based homebuilder posted earnings per share of $4.10, beating consensus expectations of $3.76. The company also said in its release that its board had authorized a $4 billion share buyback this month.

Looking ahead, DHI narrowed its full-year revenue projections to $36.8 billion to $37.2 billion, slightly lower than estimates of $36.92 billion. Meanwhile, the builder boosted its sales expectations to close on 90,000 and 90,500 homes this year, up from the prior forecast of 89,000 to 91,000.

In the three months ended June 30, buyers signed contracts for 23,001 homes, up 1% from a year ago, DHI reported. That fell short of analysts expectations of 24,718 orders for the quarter, per Bloomberg.

The miss on orders reflects the challenges builders face in selling new homes amid high mortgage rates.

One of Wall Street's favorite calls to start 2024 has finally joined the stock market rally.

After significantly underperforming the broader market for the first six months of the year, small caps have been soaring in the past week following a better-than-expected June inflation reading that has markets increasingly optimistic about Federal Reserve interest rate cuts.

In the past month, the small-cap Russell 2000 (^RUT) index is now up about 10%, far outpacing the S&P 500's 1.4% in the same timeframe. And the pressing question among Wall Street strategists right now is whether the rally has more room to run.

"We think there is room for the rotation into low quality to persist if rate cuts remain priced and the Trump 2.0 trade carries on ahead of US elections," UBS Investment Bank US equity derivatives strategist Maxwell Grinacoff wrote in a note to clients on Thursday.

Grinacoff added that the keys to the rally continuing include further cooling in inflation and economic data showing similar, or higher, levels of growth.

On Wednesday, Bank of America's head of US equity and quantitative strategy Savita Subramanian told Yahoo Finance on Wednesday the trend in small caps is "likely to persist." But to Subramanian that doesn't mean simply buying the Russell 2000 index is the right trade.

Subramanian highlighted about one-third of the Russell 2000 isn't profitable, and overall the index faces far more refinancing risks amid higher interest rates than an index like the S&P 500.

"If we are, in fact, at a point where short rates are peaking, and we're likely to see cuts, as that certainty improves, smaller-cap companies are likely to begin to outperform," Subramanian said, "Indeed, their valuations are at levels that would warrant a pretty equitable comeback. I think the areas within the small-cap spectrum that look more attractive are the higher-quality cohorts. So within small caps, industrials, even energy companies, areas that have potentially more GDP sensitivity, more consumption sensitivity, would look more attractive.

She added, "Areas that have more refinancing risk, or more credit sensitivity, are potentially still in the penalty box until the Fed actually begins to cut rates. "

Mortgage rates fell from last week in a positive development for the US housing market.

The average rate on the 30-year fixed-rate mortgage fell to 6.77% from 6.89% a week prior, marking its lowest level since mid-March, Freddie Mac reported on Thursday. A year ago, the average rate on a 30-year fixed-rate loan was 6.78%, according to Freddie Mac.

Separately, the average rate for the 15-year fixed mortgage was 6.05%, down from 6.17% a week prior and 6.06% a year ago.

“Mortgage rates are headed in the right direction, and the economy remains resilient, two positive incremental signs for the housing market,” Sam Khater, Freddie Mac’s chief economist, said in a press release.

Despite lower rates, homebuyers seem unimpressed. Applications for a mortgage to purchase a house fell 3% for the week on a seasonally adjusted basis.

Appetite for the new home market has been under pressure. Mortgage applications to purchase new homes fell 16% from May to June, according to the Mortgage Bankers Association.

“Homebuyers have yet to respond to lower rates, as purchase application demand is still roughly 5% below spring when rates were approximately the same. This is not uncommon: Sometimes as rates decline, demand weakens, and the apparent paradox is driven by buyers making sure rates don’t decline further before they decide to purchase,” Khater said.

Shares of Eli Lilly (LLY) sold off on Thursday, falling about 5%, extending losses from the day prior.

The healthcare company, a leader in the GLP-1 prescription business, had been one of the largest contributors to the stock market rally this year. The stock's decline began on Wednesday following after Roche (ROG.SW) reported promising early-stage trial data from its weight-loss pill.

Lilly weighed on the Health Care sector (XLV), which was the worst-performing sector in the S&P 500, down about 1.7%.

In an interview with Yahoo Finance, Chicago Fed president Austan Goolsbee signaled the central bank is nearing its first interest rate cut.

Yahoo Finance's Jennifer Schonberger:

Goolsbee declined to say when he expects a cut to happen, but when asked Thursday if the Fed has the basis to do so now he said, "Are the conditions in place here? Yes, this is what the path to 2% looks like," a reference to the Fed’s goal of getting inflation down to 2%.

When asked whether the Fed risks what Goolsbee calls the "golden path" — getting inflation down without triggering a recession — Goolsbee said "yes."

"You risk the golden path if you are going to be as restrictive as we are now," he added.

What has Goolsbee encouraged is a string of better monthly readings on inflation in the second quarter, calling the hotter readings of the first quarter a "bump in the road."

"It's not done, but it makes me feel a lot better when you both see it for multiple months in a row," he said.

The full interview is available below.

Bitcoin (BTC-US) fell as much as 1% on Thursday to hover below $64,000 per token on Thursday. Crypto-related stocks, including Riot Platforms (RIOT), MicroStrategy (MSTR), and Coinbase (COIN), also declined.

Bitcoin had risen sharply over the past two weeks as Republican presidential candidate Donald Trump's odds of a victory in November rose.

Trump is expected to speak at the Bitcoin Conference in Nashville, Tenn., on July 27, marking a pivotal moment for the cryptocurrency industry.

His support for bitcoin is a shift from his position when he was president. In May, his campaign said it would start accepting donations through cryptocurrency.

Internet sleuths have also pointed out Trump's vice presidential ticket pick, JD Vance, has been a bitcoin investor, judging from the Ohio senator’s financial disclosure.

Healthcare and Technology related stocks led the three major averages lower on Thursday.

The S&P 500 (^GSPC) fell 0.7% while the tech-heavy Nasdaq Composite (^IXIC) slid another 1%, adding to steep losses during the prior session.

Investors took profits as the S&P 500 Healthcare Sector ETF (XLV) hit all-time highs earlier this week. On Thursday the sector slid 1.4%.

Investors also continued their rotation out of tech stocks, with the S&P 500 Technology Sector ETF (XLK) down almost 1%.

Meanwhile Energy (XLE) stocks rose 1.3%.

The tech-heavy Nasdaq Composite (^IXIC) and the S&P 500 (^GSPC) sold off on Thursday as investors continued to rotate out of tech stocks.

The Nasdaq touched session lows, down nearly 1%, while the S&P 500 also fell 0.6%.

The Dow Jones Industrial Average (^DJI) rose to touch intraday highs before giving up those gains to fall 0.3%.

Healthcare and Technology stocks led to the downside.

Tech stocks flipped into red territory on Thursday after attempting a comeback from heavy losses in the prior session.

The tech-heavy Nasdaq Composite (^IXIC) erased earlier gains to fall 0.5% while the S&P 500 (^GSPC) also fell below the flatline. The Dow Jones Industrial Average (^DJI) rose to touch new highs, after closing at a new record in the prior session.

Tech tried to rebound after chip manufacturer TSMC (TSM) posted better-than-expected quarterly results. Shares of the Taiwanese-based company rose as much as 3% before falling into negative territory.

The Dow Jones Industrial Average (^DJI) flipped into green territory shortly after the market open on Thursday to rise 0.3%, touching another all-time intraday high.

The blue-chip index closed above the 41,000 level for the first time ever in the prior session.

The markets have broadened out recently as investors have rotated out of Big Tech names into small caps and sectors like Industrials, Financials, and Energy.

Tech took back the lead on Thursday following heavy losses in the prior session as chip manufacturer TSMC (TSM) posted better-than-expected quarterly results.

The tech-heavy Nasdaq Composite (^IXIC) rose 0.8%, while the S&P 500 (^GSPC) edged up 0.3%. The Dow Jones Industrial Average (^DJI) slid slightly, coming off an all-time closing high for the blue-chip index.

TSMC stock rose 3% after falling more than 7% in the prior session amid the emergence of geopolitical headwinds. Chip stocks Nvidia (NVDA) and ASML (ASML) also rebounded slightly on Thursday after getting hammered on Wednesday.

Concerns over even tighter restrictions on exports of semiconductor technology to China sent sector stocks spiraling down on Wednesday, alongside comments by Republican presidential nominee Donald Trump over Taiwan, a major manufacturing hub for high-end chips.

The number of continuing applications for unemployment benefits once again hit its highest level since November 2021, furthering signs the labor market is cooling as unemployed workers struggle to find new jobs.

New data from the Department of Labor showed nearly 1.87 million claims were filed in the week ending July 6, up from 1.85 million the week prior. Meanwhile, 243,000 initial jobless claims were filed in the week ending July 13, up from 222,000 the week prior and above the 229,000 economists had expected.