A Labor Department report showed initial claims for state jobless benefits fell in the week ending Jan. 21, while the Commerce Department said Gross Domestic Product expanded at an annualized rate of 2.9% in the fourth quarter, above expectations for a 2.6% increase.
“For nearly a year, the Federal Reserve has been trying to achieve a soft landing by raising short-term interest rates just enough to reduce inflation without triggering a recession.”said Richard Flynn, managing director of Charles Schwab. “It is clear that the economy remains relatively strong, which suggests that they are succeeding.”
Markets expect a 25 basis point rate hike from the Fed next week, with a terminal rate of 4.9% in June, still below the 5% supported by many policymakers.
After disappointing prospects for Microsoft Corp. In spooking markets in the previous session, Tesla Inc’s better-than-expected quarterly results reassured investors that the electric vehicle maker could weather the slowdown in the economy in 2023. Tesla rose 11%, boosting the S&P 500 consumer discretionary sector index.
Dow’s gains were held back by the chemical company Dow Inc, which fell 1.6% after missing Wall Street estimates for quarterly profit, and IBM Corp, which fell 3.4%, after missing its annual targets. of cash flow. Mastercard Inc lost 1.4% despite posting better-than-expected fourth-quarter profit. Its rival Visa Inc was down 0.1%.
For his part, Chevron Corp won after the oil company said it would triple its share buyback budget to $75 billion.
Source: Ambito
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