DIS Walt Disney Co

By Paul Vigna 

After two straight weeks of losses, major U.S. stock indexes rebounded this week. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all set new highs.

Traders were encouraged by news that China will begin cutting tariffs, a welcome sign that "phase one" of the U.S.-China trade deal is being implemented. And while the coronavirus is still spreading, and still deadly, equities markets were more focused on earnings.

Who were this week's winners and losers in the market?

WINNER: Walt Disney

The House of Mouse posted quarterly earnings Tuesday, and the report included details on its new streaming service, Disney+. After launching with about 10 million subscribers in November, Walt Disney Co. reported the service now has 28.6 million paying subscribers. The Street was expecting only about 20 million.

In the wake of the report, a number of analysts raised their price targets; investors were less impressed. The stock has fallen 1.4% since the report.

The platform wars are the next major battleground for Hollywood as technology alters the distribution model. Besides Netflix Inc., Hulu and Amazon.com Inc.'s Prime, Disney is competing against Apple Inc. (Apple TV+), Comcast Corp. (Peacock), AT&T Inc. (HBO Max) and ViacomCBS Inc. (CBS All Access). That is a heavyweight donnybrook.

Having the right mix of programming and technology is going to be key. It also doesn't hurt to have Baby Yoda on your team.

LOSER: Oil

Commodity markets have been hit harder than equity markets by fears over the coronavirus. China is the world's biggest importer of oil and copper, and many analysts expect a slowdown in its economy because of business disruptions resulting from widespread quarantines. Oil prices, in particular, have borne the brunt of those fears. On Monday, oil prices slid into bear-market territory, down more than 20% from their January highs.

The main U.S. benchmark, West Texas Intermediate, briefly traded under $50 a barrel on Monday for the first time in more than a year. It wasn't far off that price Thursday, closing at $50.95.

THE WEEK AHEAD: The economic calendar is light. Inflation ended 2019 on a benign note, and on Thursday the consumer-price index will provide the first look at inflation in 2020. On Friday, the retail sales report for January is released. Retail sales ended 2019 on a solid, if unspectacular, footing. The January report is expected to continue that trend.

On the earnings front, there is another heavy week of reports. Highlights include Cisco Systems Inc. (Wednesday) as well as PepsiCo Inc. and Kraft Heinz Co. (Thursday).

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Write to Paul Vigna at paul.vigna@wsj.com

(END) Dow Jones Newswires

February 07, 2020 08:14 ET (13:14 GMT)

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