Reuters / Brendan McDermid
- US stocks jumped Thursday as investors cheered strong GDP data and Tesla earnings.
- GDP grew 2.9% over the fourth quarter, above estimates of 2.8%.
- Tesla rallied almost 11% after posting record results after the bell on Wednesday.
US stocks jumped on Thursday as investors cheered a surprise upside in fourth quarter GDP, bucking some fears of a looming recession.
All three indexes ended the day in the green, with a gain in the Nasdaq Composite led by Tesla, which jumped almost 11% on Thursday after beating earnings estimates and posting record revenue figures.
GDP grew 2.9% annualized over the fourth quarter, according to the Commerce Department, above the 2.8% estimated by economists.
Tesla, meanwhile, reported a record revenue of $24.32 billion over the last quarter, above estimates of $24.16 billion.
Analysts from Goldman Sachs and Wedbush reiterated their "Buy" rating for the EV maker, and predicted shares would rally 38% this year to $200. JPMorgan, though, rated Tesla as "Underweight," citing disappointing profit margins. The bank predicted shares would slide 24% to $120 this year.
Here's where US indexes stood at the 4:00 p.m. closing bell on Thursday:
- S&P 500: 4,060.43, up 1.1%
- Dow Jones Industrial Average: 33,949.41, up 0.61% (205.57 points)
- Nasdaq Composite: 11,512.41, down 1.76%
Despite the positive surprise in GDP, some economists warned that the US is not out of the woods when it comes to a recession.
"The economy grew decently in 2022 -- the fears of a recession underway in the first half of last year were misplaced. However, the picture is different looking forward. The trend in real GDP weakened into year-end, and other economic indicators suggest the economy was on the cusp of contracting at the turn of the year," Comercia Bank chief economist Bill Adams said in a statement on Thursday. "Financial indicators like the inverted yield curve also signal a strong likelihood of a recession ahead," he added.
"Headline GDP was very strong beating consensus suggesting robust economic activity and if recession were to materialize a softer recession. However, the drivers behind this growth are far from ideal," Ash Alankar, the head of global asset allocation at Janus Henderson Investors said in a statement.
Alankar noted that personal consumption came in below expectations and the personal savings rate came in above expectations, a sign that consumers are already pulling back from spending out of caution.
Here's what else is going on:
- FTX aims to ask Sam Bankman-Fried's parents and brother if they got any money from the collapsed crypto exchange, lawyers said.
- The New York Times, Stanford University, Coinbase, and Netflix are among FTX's creditors, according to a recent court filing.
- Chinese electric-vehicle stocks rallied as Elon Musk says Tesla's biggest rival is coming from China.
- Tesla may be able to weather an economic storm, but some of its guidance figures aren't adding up, Gene Munster said.
- Tesla stock could rally 38% this year after its upbeat earnings report, Wedbush said.
- Natural gas prices hit their lowest level since April 2021, and have crashed 70% from highs of last year.
- Chevron wowed investors with a massive $75 billion stock buyback, which at current prices, would retire about 20% of the company's shares.
In commodities, bonds, and crypto:
- Oil prices climbed, with West Texas Intermediate up 1.17% to $81.08 a barrel. Brent crude, the international benchmark, inched higher 1.59% to $84.49 a barrel.
- Gold edged lower 0.65% to $1,930 per ounce.
- The 10-year Treasury yield ticked higher by three basis points to 3.498%.
- Bitcoin moved higher by about 1% to $23,073.41.