9.40am: Tesla stock surges on earnings beat, record revenue
US stocks advanced sharply at the open on Thursday after Commerce Department data revealed that US gross domestic product (GDP) grew at a better-than-expected 2.9% annual rate in the final quarter of 2022, although slightly cooler than the third-quarter reading.
Just after the market opened, the Dow Jones Industrial Average rose 134 points to 33,878, while the S&P 500 added 30 points at 4,046 and the tech-heavy Nasdaq Composite gained 144 points to 11,458.
Notable stock movers included shares of Tesla Inc, which jumped more than 10% after the electric vehicle maker posted a better-than-expected profit in its latest quarter, earning $3.7 billion on record revenue of $24.3 billion.
“Clearly, we’re moving through the heart of earnings season at this point,” US Bank senior investment director Bill Northey said in a statement.
“There has been some positive news and some less positive news,” he added.
8:50am: Futures extend gains on GDP beat
US stock futures built on earlier gains after fourth-quarter GDP came in above consensus expectations.
The US Bureau of Economic Analysis’ (BEA) first estimate showed the US economy expanded at an annualised rate of 2.9% in the three months ended December 31, 2022, beating estimates for a 2.8% increase.
The BEA noted that increases in private inventory investment, consumer spending, federal government spending, state and local government spending, and nonresidential fixed investment were partly offset by decreases in residential fixed investment and exports.
Futures for the Dow Jones Industrial Average (DJIA) were 0.2% higher following the announcement, while those for the broader S&P 500 index added 0.5%, and contracts for the Nasdaq-100 gained 0.9%.
6.30am: Markets anticipate strong but slower growth
Wall Street is expected to open higher on Thursday as the market awaits fourth-quarter GDP data, scheduled for release before the start of trade, for more clues about the health of the US economy. A busy earnings calendar is also likely to keep traders on their toes.
Futures for the Dow Jones Industrial Average (DJIA) rose 0.1% in pre-market trading, while those for the broader S&P 500 index added 0.3%, and contracts for the Nasdaq-100 gained 0.7%.
“As we look towards today’s first iteration of 4Q GDP it seems quite likely that we’ll see a slowdown from the strong performance in 3Q,” commented Michael Hewson, chief market analyst at CMC Markets. “Expectations are for a modest slide to 2.5%, although with signs in recent months that consumer spending is slowing you might think that there could be considerable downside risks to that estimate.”
Weekly jobless claims are also in focus after slipping to 190,000 last week and matching the lows seen last September, Hewson added.
“The slide in claims since the 241,000 peak in November suggests that the US labour market is still very tight, with little indication despite the recent announcements around job losses across the tech sector that the jobs market is deteriorating … expectations are for claims to edge higher to 205,000,” he noted.
US stocks ended mixed but off their lows on Wednesday as the market continued to digest corporate earnings reports.
The DJIA added 10 points to finish flat at 33,744, while the S&P 500 was also on an even footing at 4,016 and the Nasdaq Composite finished 21 points, or 0.2%, lower at 11,313.
“Earnings have been pretty mixed,” said Neil Wilson from Markets.com. “Boeing reported a loss but free cash flow positive for the first time in four years. Net losses rose to a mighty $5 billion but it generated $3.1 billion in free cash in the final quarter, as revenues jumped a third to $20 billion … Tesla surpassed earnings expectations with revenues rising 33% to $24.3bn.”
Companies reporting on Thursday include Mastercard, Visa, Comcast, Intel and Blackstone, among others.