By Geoffrey Smith
Investing.com -- U.S. stock markets were mixed Friday morning as another record day of new Covid-19 infections kept optimism about the economic recovery in check.
The U.S. reported a record high of over 77,000 new cases on Thursday, along with the highest daily death toll in five weeks, at least 977 according to Virustracking.net. The less volatile seven-day average for new cases has risen 22% in the last week.
By 10:10 AM ET (1410 GMT), the Dow Jones Industrial Average was down 32 points, or 0.1%, at 26,703 points, while the S&P 500 and the Nasdaq Composite were both up less than 0.1%.
The market received a modest initial lift from data showing that housing starts rose a little faster than expected in June, but building permits fell short of expectations. Moreover, the University of Michigan's consumer sentiment index fell in July to 73.2, its first fall in four months, disappointing hopes of an increase to 79 from the previous 78.1.
With other indicators suggesting a leveling off of economic activity, with the Nasdaq having posted successive record highs in recent weeks, and with the two other major indices closing in on their pre-pandemic levels, it appears that it's getting harder to make meaningful gains.
The morning's biggest mover was Netflix (NASDAQ:NFLX), which fell 7.2% after the streaming giant warned that it can't carry on growing exponentially, even if the world is put back in lockdown due to a second wave of the pandemic. The company expects subscriber growth to slow to 2.5 million in the current quarter, from over 10 million in the past three months.
The challenge of getting new subscribers is likely to get tougher in the coming months as disruptions to filming caused by the pandemic limit the amount new material it can offer. While that's a problem that is hardly limited to Netflix, the stock had risen 42% since the pandemic eruption before coming off its record highs.
Even at Thursday's closing levels, Netflix was valued at more than 10 times last year's revenue, a multiple that assumes rapid growth even though its largest market, the U.S., is fast becoming saturated.
Of the early earnings releases on Friday, asset management giant BlackRock took the eye with a 22% gain in earnings per share, helped by hefty net inflows and an unabated stock buyback program. BlackRock (NYSE:BLK) stock rose 3.7%.
While the stock market still appears to believe in the rebound continuing, the oil market appeared more skeptical. Gasoline RBOB futures fell nearly 2% to their lowest in over two weeks at just over $1.20 a gallon.