The Dow Jones Industrial Average closed near session highs with a 242-point gain Thursday amid the release of mixed economic data and more earnings reports. Other major indexes followed suit on the stock market today.
Dow stocks ended the day 0.6% higher while the S&P 500 came off session lows to muster a 0.5% gain. The tech-dominated Nasdaq flirted in negative territory, but got back some of its early winnings and finished the day 0.2% higher. Small caps on the Russell 2000 index gained 0.7%.
Meanwhile, the yield on the benchmark 10-year Treasury note fell 5 basis points to 4.12%. And the Innovator IBD 50 ETF climbed 0.6%.
The market action came as the Commerce Department reported fourth-quarter GDP grew 3.3% versus Econoday's estimate for a 2% increase. Meanwhile, new orders for durable goods in December were unchanged. Wall Street had expected an increase of 1%. Excluding transportation, orders rose 0.6%, above views for 0.2%, while orders for core capital goods gained 0.3% versus a 0.2% estimate.
Initial jobless claims rose to 214,000 for the week ended Jan. 20, ahead of economists' views for 200,000.
The Personal Income and Outlays report for December is due from the Commerce Department Friday. The Federal Reserve's preferred inflation gauge is expected to slow down to 0.3% from November's 0.4% increase. Core PCE is seen rising 0.2% on a monthly basis but falling to 3% annually.
Advancers Beat Decliners
Market breadth was encouraging as advancers beat decliners on both the Nasdaq and the New York Stock Exchange. Volume on the NYSE was slightly lower and volume was higher on the Nasdaq on the stock market today compared with the same time on Wednesday.
Among the 11 S&P sectors, communication services and energy gained the most, while consumer discretionary lagged, weighed down by Tesla.
Google-parent Alphabet was a big gainer on the Nasdaq, as shares climbed 2% and hit a record close and an intraday high at 153.05. The stock's previous record was reached in February 2022.
Stocks Moving Today
Fortunes continue to sour for Tesla. Fourth-quarter results missed views late Wednesday as earnings fell to 71 cents a share versus expectations of 73 cents. Sales also disappointed after Tesla reported $25.17 billion while Wall Street predicted $25.62 billion.
The stock plunged more than 10% Thursday, falling further below the 50-day line and dragging its relative strength line lower.
Based on Tesla's 3.2 billion shares outstanding per IBD MarketSmith, the company lost more than $80 billion of its market cap in a single day.
Margins have been under pressure as the electric-vehicle giant cut prices aggressively throughout 2023 and in January. As a result, earnings have declined, and sales growth has slowed, for two straight quarters.
Stiff Competition For Tesla In China
On Wednesday, Chief Executive Elon Musk warned in the earnings call that Tesla faces stiff competition in China and elsewhere.
"Well, our observation is generally that the Chinese car companies are the most competitive car companies in the world," Musk said. "So I think they will have significant success outside of China depending on what kind of tariffs or trade barriers are established."
Tesla also said its vehicle volume growth rate in 2024 may be "notably lower" than in 2023 as the company also works on its next-generation, low-cost vehicle and that it was between "two growth waves." However, Musk added that the company is "very far along on our next-generation, low-cost vehicle."
The Magnificent Seven stock has been underperforming in recent weeks. The stock's Relative Strength Rating has deteriorated from 95 six months ago to 68. Its Composite Rating of 61 also lags, though the Earnings Per Share Rating at 88 brings some relief.
Stock Market Today: Adobe Nears Buy Point
Adobe was on the move Thursday, as it neared a buy point of 633.89 out of a flat base, according to IBD MarketSmith. The stock ended the day up 2.7%.
Adobe's fiscal first-quarter earnings are due March 14. The company expects 10% growth in sales to $5.13 billion and earnings of $4.38 a share, or 15% higher than the prior year's quarter. Adobe has added several artificial intelligence features to its Creative Cloud product.
During its November-ended fourth quarter, Adobe sales rose 12% to $5.05 billion while earnings rose 19% from the year-ago period to $4.27 a share. Digital media sales were the biggest component with $3.72 billion in sales, while $1.27 billion came from its digital experience business.
Shares gapped down on Dec. 14 after Adobe announced fourth-quarter results, but they found support at the 50-day moving average and built the current base. The stock has a Composite Rating of 94 and EPS Rating of 97. Its Relative Strength Rating is 92.
Mutual funds own 49% of shares outstanding. More funds have been buying ADBE stock over the past five quarters and in recent weeks. That has clearly helped the stock earn an Accumulation/Distribution Rating of B-.
Stock Market Today: Dow Jones Leader To Report
Elsewhere, Dow Jones leader and chipmaker Intel fell more than 6% after hours in the wake of fourth-quarter and full-year results. Sales grew 10% to $15.4 billion. The company also reported earnings of 54 cents per share.
KLA also sank 5% on fiscal second-quarter earnings late Thursday. The company beat estimates but offered an outlook that was well below views for the current quarter.
Among earnings movers, United Rentals surged 13% in strong volume after a positive quarterly report. Sales grew 13% to $3.7 billion while earnings of $11.26 per share rose 16%. Shares are extended from an alternate buy point of 585.50.
In managed care, Humana sold off sharply after its fourth-quarter report. The company realized a loss of 11 cents per share and expects higher costs to dent revenue during 2024.
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