A 12% dive in Netflix (NasdaqGS: NFLX) shares on a disappointing second-quarter outlook pushed Internet sector ETFs in the red on Tuesday despite a 100-point rise in the Dow Jones Industrial Average.
“Netflix’s first-quarter results were decent but second-quarter guidance for domestic subscriber growth scared the market,” said Morningstar analyst Michael Corty in a note Tuesday.
“While earnings guidance and full year sub guidance came in well above our estimates, second quarter growth forecasts fell short of some more aggressive street assumptions,” said Daniel Ernst at Hudson Square Research on Netflix’s results. “Bottom line, [the]company reported a strong quarter and issued optimistic full year guidance, while disappointing on near term guidance – creating a potential buying opportunity in our opinion.”
The stock also represents 4.3% of First Trust ISE Cloud Computing Index Fund (NasdaqGS: SKYY). The ETF was down more than 1% in afternoon trading Tuesday.
First Trust Dow Jones Internet Index Fund
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