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Stock Market Wrap-Up: Buyout Rumors Lift Nokia; Netflix Climbs as Earnings Loom

By Dan Caplinger – Apr 16, 2020 at 5:13PM

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The stock market managed to post modest gains after a slow start.

The stock market was largely mixed most of Thursday, posting a late-day push higher that brought the Dow Jones Industrial Average (^DJI 2.66%) just barely out of the red. As we've seen often recently, the Nasdaq Composite (^IXIC 2.27%) led the way higher, with the S&P 500 (^GSPC 2.59%) splitting the difference.

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Data source: Yahoo! Finance.

Among individual stocks, Nokia (NOK 2.81%) earned some gains as investors tried to decide whether some favorable rumors were actually true. Meanwhile, shareholders in Netflix (NFLX 1.53%) have become increasingly optimistic about the company's prospects as it prepares to report its first-quarter earnings results next week.

Is Nokia a takeover target?

Nokia's shares gained 7% as investors reacted to reports that a possible acquirer might be interested in buying the company. The latest news added to speculation that's been going on for a few months now, although there hasn't been any confirmation.

Speculation has arisen that Nokia might be trying to fend off a hostile takeover. The news report that prompted the rumors claimed that the network equipment maker has hired a prominent Wall Street investment bank to help advise it about its appropriate response to the overtures.

Black rectangular piece of networking equipment with Nokia logo.

Image source: Nokia.

Nokia has had some challenges lately. The company lost a key piece of business in China when telecom giant China Mobile chose not to include it among companies providing equipment and services related to 5G network upgrades.

Nokia shares have bounced off their lows from last month, but they're still well below where they traded a year ago. That could make now an opportune time for a buyer to look at the Finnish telecom equipment company, but investors shouldn't take the rumors as true just yet.

Seeing a great story unfold

Adding to its recent gains, Netflix shares finished up 3% Thursday, jumping to another record high. As investors get ready to see the streaming video specialist's latest quarterly numbers on April 21, Wall Street analysts are getting ever more optimistic about what they're likely to be.

A trio of analyst companies set higher price targets on Netflix stock Thursday. The most bullish, J.P. Morgan, raised its price target on Netflix to $480 per share, up $70 from its previous projection. The analyst company argued that the need to stay at home is accelerating the existing trend toward video streaming. Similarly, Morgan Stanley made a $50 boost to its price target, raising it to $450 per share and stating its belief that Netflix will have an even larger competitive edge because of the pandemic than it had before.

Even bearish investors have slightly higher views on Netflix. Wedbush previously had a $173 price target on Netflix, but it did raise that projection slightly to $194. The analyst company thinks that the stock price already fully reflects the benefits from stay-at-home viewers and believes that competition remains a major concern.

Like most high-growth stocks, Netflix has been controversial for quite a while. Shareholders should expect continued volatility until the actual numbers become available next Tuesday afternoon.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Netflix. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
$239.04 (1.53%) $3.60
Nokia Corporation Stock Quote
Nokia Corporation
$4.39 (2.81%) $0.12
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$29,490.89 (2.66%) $765.38
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$3,678.43 (2.59%) $92.81
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
$10,815.43 (2.27%) $239.82

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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