July 22 - Summary: Weaker-than-expected subscriber growth at Netflix offsets higher-than-expected profits; McDonald's investors digest unhappy meal; Yahoo slides as Directors exit; S&P 500 hits lifetime close as housing recovery undaunted. Conway G. Gittens reports.
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Fresh after the first ever Emmy award nominations for content not made for TV or cable with "House of Cards" - Netflix kicks off after-hours earnings reports. The Internet streaming service beat higher profit forecasts but more importantly subscriber growth was not as strong as Wall Street predicted. Guidance was also weak. The stock was down ahead of the earnings and sank further on those customer numbers.
The other notable earnings of the day: McDonald's. The world's biggest restaurant chain missed earnings forecasts as sales in Europe fall for the third straight quarter. Same store sales were barely up in the U.S. as competition from Wendy's and Burger King eat away at McDonald's lead.
In other corporate news, changes on the Board of Directors at Yahoo. Activist investor Dan Loeb and two of his colleagues exiting the board and Loeb is selling two-thirds of his stake back to Yahoo. Loeb was responsible for shaking up the internet company and bringing in current CEO Marissa Mayer.
Reuters BreakingViews columnist Rob Cyran wonders how this will impact Yahoo's turnaround.
SOUNDBITE: ROB CYRAN, COLUMNIST, REUTERS BREAKINGVIEWS (ENGLISH) SAYING:
"Without the three directors from Loeb, you've kind of reduced a bit of the discipline on the company. You know, will Yahoo start going back buying more companies like Tumblr, revenue free sites for very large amounts? My guess is chance have gone up."
Investors seemed to have the same interpretation; sending shares down more than four percent.
On the economic front, sales of previously owned homes backslid for the first time in three months but prices jumped to a five-year high.
Wall Street liked the numbers - nudging the S&P 500 to a record high. Blue chips were subdued due to McDonald's but tech stocks rebounded from last week's beat down.
In Europe, Swiss bank UBS surprised investors with a better-than-expected early earnings release.
The surprise however fell flat in Germany and the UK, France ended modestly higher.
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