Stock Market Today: Stocks Close Higher After GDP, Tesla Earnings
Government data showed the U.S. economy remained resilient at the end of 2023.
Stocks opened higher Thursday after data showed the U.S. economy remained strong in the final three months of 2023. However, the main indexes ran out of steam around midday, pressured by a negative earnings reaction for Magnificent 7 stock Tesla (TSLA).
Ahead of the opening bell, the Bureau of Economic Analysis said gross domestic product (GDP) increased at a 3.3% annual rate in Q4, quicker than the 2.0% economists were expecting but slower than Q3's 4.9% spike. GDP growth for all of 2023 was 2.5%, more than 2022's 1.9% rise.
The data points to an economy that remained resilient even as the Federal Reserve hiked interest rates to a 22-year high in order to tame red-hot inflation. The next Fed meeting kicks off Tuesday, with the central bank widely expected to keep rates unchanged.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
However, a string of economic reports recently has echoed today's data and lowered market assumptions for a March rate cut. Indeed, according to CME Group's FedWatch tool, futures traders are now pricing in a 49% chance the Fed will keep rates the same at its March meeting, up from 12% one month ago. The likelihood for a May rate cut is also now at 49%, up from last month's 12% probability.
Tesla stock spirals after earnings
In single-stock news, Tesla slumped 12.1% after the electric vehicle maker reported earnings. In the fourth quarter, TSLA disclosed earnings of 71 cents per share on $25.2 billion in revenue, while analysts were expecting earnings of 74 cents per share on $25.6 billion in sales. And while operating margin improved on a quarter-over-quarter basis to 8.2%, it was much lower than the 16% operating margin reported in the year-ago period.
Still, CFRA Research analyst Garrett Nelson kept a Buy rating on Tesla. While the analyst admits the earnings miss was "disappointing" and "uncharacteristic," the company's rumored plans to launch its mass market electric vehicle later this year "could be the catalyst the stock needs."
PARA pops on buzz the company could be taken private
Elsewhere, Paramount Global (PARA) – a member of Warren Buffett's Berkshire Hathaway equity portfolio – climbed 4.5% after media reports indicated the company is laying off employees. According to CNBC, Paramount CEO Bob Bakish wrote in a memo to employees that the Showtime parent's "priority is to drive earnings growth," and it will do so in part by operating "a leaner company." No details were given on how many job cuts there will be.
The layoff news comes on the heels of Wednesday's headlines that Skydance Media, the production company founded by David Ellison, is considering taking Paramount private. Skydance is reportedly in talks to buy National Amusements, a holding company owned by the Redstone family that is the majority stakeholder in PARA.
As for the main indexes, the Dow Jones Industrial Average added 0.6% to 38,049, the S&P 500 gained 0.5% to 4,894, and the Nasdaq Composite rose 0.2% to 15,510.
Related content
- Kiplinger's Earnings Calendar for This Week
- Home Sales Hit Lowest Level in Nearly 30 Years
- Netflix Password Sharing Fees: What You Need to Know
-
It's Time to Rethink What 'Aging Well' MeansDon’t fall into the trap of thinking there is a "right way" to age. Here's how to reframe aging in a healthy, achievable way.
-
Your Guide to Financial Stability as a Military SpouseThese practical resources and benefits can help military spouses with managing a budget, tax and retirement planning, as well as supporting their own career
-
3 Steps to Keep Your Digital Data Safe from CyberattacksAs data breaches and cyberattacks increase, it's vital to maintain good data hygiene and reduce your personal information footprint. Find out how.
-
S&P 500 Tops 7,000, Fed Pauses Rate Cuts: Stock Market TodayInvestors, traders and speculators will probably have to wait until after Jerome Powell steps down for the next Fed rate cut.
-
S&P 500 Hits New High Before Big Tech Earnings, Fed: Stock Market TodayThe tech-heavy Nasdaq also shone in Tuesday's session, while UnitedHealth dragged on the blue-chip Dow Jones Industrial Average.
-
Dow Rises 313 Points to Begin a Big Week: Stock Market TodayThe S&P 500 is within 50 points of crossing 7,000 for the first time, and Papa Dow is lurking just below its own new all-time high.
-
Nasdaq Leads Ahead of Big Tech Earnings: Stock Market TodayPresident Donald Trump is making markets move based on personal and political as well as financial and economic priorities.
-
11 Stock Picks Beyond the Magnificent 7With my Mag-7-Plus strategy, you can own the mega caps individually or in ETFs and add in some smaller tech stocks to benefit from AI and other innovations.
-
Nasdaq Adds 211 Points as Greenland Tensions Ease: Stock Market TodayWall Street continues to cheer easing geopolitical tensions and President Trump's assurances that there will be no new tariffs on Europe.
-
Dow Soars 588 Points as Trump Retreats: Stock Market TodayAnother up and down day ends on high notes for investors, traders, speculators and Greenland.
-
If You'd Put $1,000 Into UPS Stock 20 Years Ago, Here's What You'd Have TodayUnited Parcel Service stock has been a massive long-term laggard.
