Wall Street closes green as GDP data eases recession worries
For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
Microsoft, Tesla lead S&P, Nasdaq higher
IBM announces job cuts, asset divestment
Bed Bath & Beyond sinks on default notice
Intel slides after the bell following results
Indexes up: Dow 0.61%, S&P 1.10%, Nasdaq 1.76%
Updates with closing prices
By Stephen Culp
NEW YORK, Jan 26 (Reuters) -Wall Street ended a choppy session higher on Thursday as investors grappled with an onslaught of economic data and a string of mixed corporate earnings, all while eyeing the clock as it ticks down toward next week's Federal Reserve monetary policy meeting.
While all three major U.S. stock indexes advanced, megacap momentum stocks, buoyed by Tesla Inc's TSLA.O earnings beat and upbeat sales forecast, helped put the Nasdaq in the lead.
A raft of data showed the U.S. economy fared better in the fourth quarter than analysts expected, and the labor market remains tight, despite some signs of weakening demand. This is a double-edged sword for investors, as it could embolden the Fed to keep key interest rates at restrictive levels for longer.
While financial markets have largely priced in a 25 basis point rate from the central bank next Wednesday, that sentiment is not unanimous.
"The economic data had something in it for everybody; for the dreamers who think the economy is just slow enough to put the Fed on hold, and the pessimists who think growth is still too hot for the Fed to step away," said David Carter, managing director at JPMorgan Private Bank in New York.
"Hope is not an investment strategy, and the economic facts could soon weigh on the market," Carter added. "The biggest uncertainty is what will happen in the back half of this year."
Fourth-quarter earnings season has hit full stride, with more than one fourth of the companies in the S&P 500 having reported. Of those, 69% have beaten consensus estimates, up from 67% on Wednesday, according to Refinitiv.
Analysts now see aggregate fourth quarter earnings falling 2.7%, worse than the 1.6% year-on-year decline seen on Jan. 1, but an improvement over the 3% annual decline as of Wednesday, per Refinitiv.
The Dow Jones Industrial Average .DJIrose 205.57 points, or 0.61%, to33,949.41, the S&P 500 .SPXgained 44.21 points, or 1.10%, to4,060.43 and the Nasdaq Composite .IXICadded 199.06 points, or 1.76%, to11,512.41.
Of the 11 major sectors of the S&P 500, all but consumer staples .SPLRCS advanced. Energy .SPNY led the percentage gainers, boosted by rising crude prices CLc1 due to signs of increasing demand from China.
Tesla Inc TSLA.O provided one of the heftiest boosts to the S&P 500 and the Nasdaq, its shares jumping 11.0 % in the wake of its earnings report.
Chevron Corp CVX.N announced it would triple its budget for share buybacks, which sent the oil major's stock up 4.9 %.
Among losers, IBM Corp IBM.N fell 4.5 % in the wake of its announcement that it would cut jobs divest some assets after falling short of its annual cash target.
Shares of Bed Bath & Beyond Ink BBBY.O plunged 22.2 % after the home goods retailer received a default notice from JPMorgan Chase.
Southwest Airlines Co LUV.N slid 3.2 % after warning of current quarter losses.
And despite forecasts of strong demand for air travel in 2023, the broader S&P 1500 Airlines index dropped 0.9 %.
That might have something to do with Mastercard Inc's MA.N disappointing current quarter revenue forecast, cited an expected diminishing pent-up travel demand. The consumer payments company's shares dipped 1.3 %.
Shares of Intel Corp INTC.O dropped as much as 6% in extended trading after the company posted revenue below Street expectations.
Mastercard rival Visa Inc V.N gained nearly 2% after hours following it reported a rise in quarterly profit due to resilient consumer spending.
Advancing issues outnumbered declining ones on the NYSE by a 2.35-to-1 ratio; on Nasdaq, a 1.45-to-1 ratio favored advancers.
The S&P 500 posted 23 new 52-week highs and no new lows; the Nasdaq Composite recorded 111 new highs and 32 new lows.
Volume on U.S. exchanges was 11.34 billion shares, compared with the 10.93 billion average over the last 20 trading days.
Reporting by Stephen Culp; Additional reporting by Johann M Cherian and Shreyashi Sanyal in Bengaluru; Editing by Aurora Ellis
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
