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Key Takeaways
- The S&P 500 added 0.5% on Thursday, Jan. 25, 2024, posting its fifth straight record close after data showed the U.S. economy grew more than expected in the fourth quarter.
- American Airlines shares soared after the airline beat quarterly estimates and issued upbeat full-year guidance amid an uptick in demand for air travel.
- Shares of Tesla fell after the automaker reported weaker-than-expected quarterly results and warned that vehicle volume growth could moderate in 2024.
U.S. equities indexes moved higher after gross domestic product (GDP) data showed that the economy grew at an annualized rate of 3.3% in the fourth quarter of 2023, outshining economists’ median forecast of 2%.
The S&P 500 gained 0.5%, jumping to an all-time closing high for the fifth consecutive trading day. The Dow added 0.6%, while the Nasdaq recovered from an afternoon slump to close the session 0.2% higher.
United Rentals ( URI ) stock led the S&P 500, soaring 13.0% after the company posted record-setting earnings for the fourth quarter, with net income rising 6.3% year over year. The renter of industrial and construction equipment also announced plans to buy back $1.5 billion worth of common stock this year and boost its dividend per share by 10%.
An impressive earnings report also helped lift shares of American Airlines ( AAL ), which climbed 10.3% Thursday after the airline’s sales and profits for the fourth quarter came in ahead of expectations. In addition, American issued better-than-expected full-year guidance amid an uptick in demand for air travel.
Following the theme of earnings and guidance beats, International Business Machines ( IBM ) shares jumped 9.5% after the technology and business services giant exceeded estimates and provided an upbeat forecast for 2024. The company highlighted strong demand for storage and server solutions that support the adoption of artificial intelligence (AI) technology.
Shares of Tesla ( TSLA ) posted Thursday’s steepest losses among S&P 500 companies, plunging 12.1% after its revenue and earnings for the fourth quarter fell short of analysts’ forecasts . The electric vehicle (EV) maker noted that vehicle volume growth could slow down this year owing to a lull between the release of new Tesla models.
Humana ( HUM ) shares tumbled 11.7% as the health insurer reported significant losses for the fourth quarter and cautioned that higher medical costs could dampen its profits through next year. Shares of Molina Healthcare ( MOL ), UnitedHealth ( UNH ), and CVS ( CVS ) also moved lower.
Northrup Grumman ( NOC ) shares dropped 6.3% after the defense contractor disclosed an unanticipated loss for the fourth quarter. Budget excesses related to the company’s B-21 Raider bomber, under contract from the U.S. Air Force, contributed to the unfavorable quarterly results.