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Wall Street stocks rallied Thursday on stronger than expected US economic data that raised hopes of a “soft landing” for the country, despite the central bank’s interest rate hikes. news online
The world’s biggest economy expanded 2.9 percent in the fourth quarter last year, exceeding analyst estimates with help from resilient consumer spending.
While the government GDP data did not eliminate recession fears, it offered a reason for optimism that the Federal Reserve will manage to lower inflation without tipping the economy into a major downturn.
The Dow Jones Industrial Average bounced 0.6 percent to 33,949.41, while the broad-based S&P 500 Index surged 1.1 percent to 4,060.43.
The tech-heavy Nasdaq Composite Index logged the biggest gain of 1.8 percent, to 11,512.41.
Latest data “suggests that we’re still in an ongoing economic expansion,” said Nick Reece of Merk Investments.
“The longer that this expansion does go on, the more likely it is that we that we have a soft landing,” he said.
Among individual companies, Tesla soared 11 percent after reporting record quarterly earnings and as CEO Elon Musk said recent price cuts in the United States and Europe had boosted demand.
American Airlines rose 2.2 percent as it offered a confident outlook on 2023 travel demand after reporting record quarterly revenues on Thursday.
But rivals United Airlines and Delta Air Lines both closed lower.
Southwest Airlines, which reported a loss, fell 3.2 percent. It had canceled more than 16,700 flights during the quarter as its scheduling systems became overwhelmed as the United States was hit by sub-freezing temperatures late last year.
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