NEW YORK, NEW YORK – JANUARY 22: Traders work on the floor of the New York Stock Exchange during afternoon trading on January 22, 2024 in New York City. The Dow Jones and S&P both hit all time highs with the Dow Jones closing over 38,000 points for the first time ever as stocks continue to rise.
(Photo by Michael M. Santiago/Getty Images)
Michael M. Santiago | Getty Images News | Getty Images
The S&P 500 was on track to rise for a sixth straight day, overcoming a slump in Tesla as data indicated continued economic growth.
The broad index rose 0.3%, on pace to clinch another all-time closing record. The Dow Jones industrial Average traded 157 points, or 0.4%, higher. The Nasdaq Composite was near flat, dragged down by a post-earnings tumble in Tesla shares.
Despite Thursday’s underperformance, the Nasdaq has outperformed this week, tracking to finish up 1.2%. The S&P 500 has advanced 0.9%, while the Dow is 0.3% higher on the week. Both the S&P 500 and Nasdaq have finished higher for past five sessions.
Gross domestic product data showed the U.S. economy grew at a rate of 3.3% in the fourth quarter. That’s much higher than the 2% expectation from economists polled by Dow Jones, underscoring continued economic resiliency despite interest rate hikes from the Federal Reserve.
Thursday’s report also included encouraging data on the inflation front. The personal consumption expenditures price index posted a quarterly gain of 2% when excluding food and energy, a core gauge that the Fed prefers when assessing inflation. Headline inflation increased just 1.7%.
“That was a really healthy mix of data,” said Kevin Gordon, senior investment strategist at Charles Schwab. “That’s pretty much as close to nirvana as you can get for the Fed in looking for non-inflationary growth.”
But a sell-off in Tesla, a retail investor favorite, weighed on the market. Shares plunged 12% after the electric vehicle maker posted disappointing fourth-quarter results and warned of lower vehicle volume growth for 2024.
On the other hand, IBM jumped more than 9% after the technology company posted adjusted earnings and revenue that beat analysts’ predictions.
More than one-fifth of S&P 500 companies have reported financials this earnings season, according to FactSet. Nearly 74% of those have surpassed Wall Street expectations, the firm’s data shows.