US close: Dow and S&P 500 hit fresh highs after GDP beat

(Sharecast News) - The Dow and S&P 500 both hit new record highs on Thursday after an upside surprise in US economic growth lifted sentiment, with airline stocks and IBM among the most prominent risers of the day. The Dow gained 0.6% to a new closing peak of 38,049.13 with only four constituents in negative territory by the end of play. The S&P 500 rose 0.5% to set the fifth consecutive closing record of 4,894.16. The Nasdaq edged 0.2% to 15,510.5 - its highest in over two years.

"The US stock market appears to literally be on fire after the latest US GDP numbers came in hotter than expected," says AJ Bell head of financial analysis Danni Hewson.

"The strength of the US economy has further diminished hopes central bankers might plump for March to begin unwinding, but a few months here or there isn't such a big deal when you can see the economic landing spot glowing brightly. People are still spending and stuff is still being built, which is great for business and great for that all important outlook."

The US economy grew at a year-on-year rate of 3.3% in the fourth quarter, according to preliminary estimates released by the Bureau of Economic Analysis on Thursday. This was a big slowdown from the significant 4.9% expansion registered in the third quarter, but will have come as a surprise to many economists who are broadly looking for growth of just 2.0%.

In other news, initial weekly jobless claims totalled 214,000 in the week to 19 January, up 25,000 from a revised 189,000 the week before, which was upped by 2,000. The consensus estimate was 200,000. However, the four-week moving average declined 1,500 to 202,250 and economists believe the near-term trend remains positive.

Meanwhile, US durable goods orders came in flat in December after 5.5% growth the previous month, well below the 1.1% increase expected.

Boeing drops, airlines gain

Shares in Boeing dropped on Thursday after the Federal Aviation Administration ordered the aerospace manufacturer to stop a production expansion of its 737 MAX model on the same day US airlines expressed anger at the company's failings in their quarterly earnings statements.

Alaska Air, which only uses Boeing planes, unveiled a $150m hit to profits from the grounding of flights related to the incident as it reported its latest quarterly results, and said it would likely not make its previous targets for capacity growth. However, shares rose after adjusted earnings beat forecasts.

Southwest Airlines also announced that it would cut the 737 MAX 7 aircraft from its fleet plans for 2024, following a similar announcement earlier in the week from United Airlines. Southwest was in the red as quarterly numbers underwhelmed.

American Airlines was a high riser, jumping 10% after beating forecasts with both earnings and sales, as the airline outlined expectations of scaled back Boeing deliveries this year.

IBM's stock surged 9% to more than a 10-year high after the software giant delivered bullish revenue guidance for 2024 due to increased demand for its AI services.

Tesla, the first of the so-called Magnificent Seven tech stocks to report, disappointed shareholders with its results after the closing bell on Wednesday as both earnings and sales missed analysts' forecasts for the fourth quarter. Shares dropped over 12% after the electric carmaker also said 2024 volumes would be "notably lower" than 2023.

Dow Jones - Risers

International Business Machines Corporation (CDI) (IBM) $190.43 9.49% Dow Chemical Co. (DOW) $54.94 3.48% Caterpillar Inc. (CAT) $299.95 3.47% Walgreens Boots Alliance, Inc. (WBA) $23.11 3.31% 3M Co. (MMM) $95.98 2.94% Chevron Corp. (CVX) $148.57 2.52% Verizon Communications Inc. (VZ) $42.29 2.45% Procter & Gamble Co. (PG) $155.62 2.30% Cisco Systems Inc. (CSCO) $52.33 1.99% Amgen Inc. (AMGN) $310.26 1.56%

Dow Jones - Fallers

Boeing Co. (BA) $201.88 -5.72% Unitedhealth Group Inc. (UNH) $493.40 -3.86% McDonald's Corp. (MCD) $297.16 -1.08% Apple Inc. (AAPL) $194.17 -0.17%

S&P 500 - Risers

United Rentals Inc. (URI) $651.42 12.96% American Airlines Group (AAL) $15.36 10.27% International Business Machines Corporation (CDI) (IBM) $190.43 9.49% Resmed Inc. (RMD) $186.29 8.48% Bread Financial Holdings, Inc. (BFH) $32.56 6.98% Delta Airlines Inc. (DAL) $40.18 5.21% United Airlines Holdings Inc (UAL) $42.96 5.19% Travel + Leisure Co (TNL) $41.41 5.13% Crown Castle International (CCI) $110.66 4.97% Alaska Air Group Inc. (ALK) $37.42 4.47%

S&P 500 - Fallers

Humana Inc. (HUM) $355.36 -11.69% Northrop Grumman Corp. (NOC) $434.55 -6.33% Boeing Co. (BA) $201.88 -5.72% Unitedhealth Group Inc. (UNH) $493.40 -3.86% Marsh & McLennan Companies Inc. (MMC) $191.09 -3.83% Paypal Holdings Inc (PYPL) $60.71 -3.67% Pfizer Inc. (PFE) $27.47 -3.04% CVS Health Corp (CVS) $72.01 -2.97% Albemarle Corp. (ALB) $118.43 -2.66% Centene Corp. (CNC) $73.49 -2.56%

Nasdaq 100 - Risers

American Airlines Group (AAL) $15.36 10.27% Hasbro Inc (HAS) $50.09 4.09% Western Digital Corp. (WDC) $60.33 3.96% Comcast Corp. (CMCSA) $45.27 3.36% Walgreens Boots Alliance, Inc. (WBA) $23.11 3.31% NetEase Inc. Ads (NTES) $103.50 3.27% Netflix Inc. (NFLX) $562.00 3.14% Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $493.22 3.02% Adobe Systems Inc. (ADBE) $622.58 2.65% Asml Holdings N.V. (ASML) $869.08 2.57%

Nasdaq 100 - Fallers

Tesla Inc (TSLA) $182.63 -12.13% Paypal Holdings Inc (PYPL) $60.71 -3.67% Broadcom Inc. (AVGO) $1,230.00 -1.90% Baidu Inc. (BIDU) $108.61 -1.82% Texas Instruments Inc (TXN) $167.42 -1.56% Mercadolibre Inc. (MELI) $1,738.80 -1.36% Cadence Design Systems Inc. (CDNS) $291.19 -1.26% Biomarin Pharmaceutical Inc. (BMRN) $91.30 -1.09% Workday, Inc. (WDAY) $292.36 -1.06% chip Technology Inc. (MCHP) $89.65 -1.00%