Wall Street has ended a choppy session higher 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 US stock indices advanced on Thursday, megacap momentum stocks, buoyed by Tesla Inc’s earnings beat and upbeat sales forecast, helped put the Nasdaq in the lead.
A raft of data showed the US economy fared better in the fourth quarter than analysts expected, and the labour 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.
Fourth-quarter earnings season has hit full stride, with more than a quarter of the companies in the S&P 500 having reported.
The Dow Jones Industrial Average rose 205.57 points, or 0.61 per cent, to 33,949.41, the S&P 500 gained 44.21 points, or 1.10 per cent, to 4,060.43 and the Nasdaq Composite added 199.06 points, or 1.76 per cent, to 11,512.41.
Of the 11 major sectors of the S&P 500, all but consumer staples advanced. Energy led the percentage gainers, boosted by rising crude prices due to signs of increasing demand from China.
Tesla Inc provided one of the heftiest boosts to the S&P 500 and the Nasdaq, its shares jumping 11 per cent after its earnings report.
Chevron Corp announced it would triple its budget for share buybacks, which sent the oil major’s stock up 4.9 per cent.
Among losers, IBM Corp fell 4.5 per cent 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 plunged 22.2 per cent after the home goods retailer received a default notice from JPMorgan Chase.
Southwest Airlines Co slid 3.2 per cent after warning of current quarter losses.
That might have something to do with Mastercard Inc’s disappointing current quarter revenue forecast, cited an expected diminishing pent-up travel demand.
The consumer payments company’s shares dipped 1.3 per cent.
Shares of Intel Corp dropped as much as 6 per cent in extended trading after the company posted revenue below Street expectations.
Mastercard rival Visa Inc gained nearly two per cent after hours following it reported a rise in quarterly profit due to resilient consumer spending.
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