A choppy start for stocks on Thursday led to a solid finish as investors mulled over the latest batch of quarterly earnings and economic reports.
Tesla (TSLA) headlined a busy earnings calendar – and Wall Street cheered the electric vehicle maker's fourth-quarter results. Meanwhile, the latest gross domestic product (GDP) reading showed the U.S. economy grew at a faster-than-expected pace in the final three months of 2022, even as interest rates increased and inflation remained stubbornly high.
Tesla released its Q4 results late Wednesday, sending shares up 11% today. The company reported earnings of $1.19 per share on $24.3 billion in revenue – both record figures for TSLA. Consensus estimates were for earnings of $1.13 per share on $24.7 billion in sales. The carmaker also said it plans to "grow production as quickly as possible" in order to meet its target of 50% average annual growth.
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As for today's economic data, the Bureau of Economic Analysis said this morning that GDP grew at an annual rate of 2.9% in the fourth quarter, a quicker pace than what was seen in the third quarter. However, consumer spending slowed, rising 2.1% in Q4 vs. 2.3% in Q3.
Wall Street's top minds were quick to chime in on the GDP, including Carol Schleif, chief investment officer at BMO Family office. "Thursday's GDP report suggests that the economy is relatively strong even in the face of aggressive measures by the Federal Reserve to calm inflation," Schleif says. "Businesses and consumers are moderating their spending after the initial exuberant post-pandemic surge and we expect this slowing of momentum to allow the economy to tick along solidly but on a slower and more sustainable path."
At the close, the Nasdaq Composite was up 1.8% at 11,512, the S&P 500 was 1.1% higher at 4,060, and the Dow Jones Industrial Average had gained 0.6% to 33,949.
Chevron Unveils $75 Billion Buyback Program
Chevron (CVX) was one of the best Dow Jones stocks today – second only to Salesforce (CRM, +5.7%) – climbing 4.8% after the energy giant unveiled a massive share repurchase program. Specifically, CVX said its board of directors approved $75 billion in stock buybacks, with the program set to go into effect on April 1. The oil giant – well-known as being one of the best dividend stocks on Wall Street – also hiked its quarterly payout by 6% to $1.51 per share.
CVX's announcement and subsequent share-price move made energy the best-performing sector today (+3.2%), but this is just more of the same. Year-to-date, the energy sector is up more than 6%, building on 2022's impressive gains.
And there are plenty of potentially positive catalysts for oil stocks over the next few months, which could keep the wind at their back. These include China's reopening, the Biden administration ending the release of strategic petroleum reserves, and rising demand in the spring and summer months, says Louis Navellier, chairman and founder of Navellier & Associates. Continued gains could certainly benefit the best energy stocks, while energy ETFs would also reap the rewards.
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