US STOCKS-Wall Street closes green as GDP data eases recession worries

By Stephen Culp

NEW YORK, Jan 26 (Reuters) – Wall Street ended a choppy
session higher on Thursday as investors grappled with an
onslaught of economic data and a string of mixed corporate
earnings, all while eyeing the clock as it ticks down toward
next week’s Federal Reserve monetary policy meeting.

While all three major U.S. stock indexes advanced, megacap
momentum stocks, buoyed by Tesla Inc’s earnings beat
and upbeat sales forecast, helped put the Nasdaq in the lead.

A raft of data showed the U.S. economy fared better in the
fourth quarter than analysts expected, and the labor market
remains tight, despite some signs of weakening demand. This is a
double-edged sword for investors, as it could embolden the Fed
to keep key interest rates at restrictive levels for longer.

While financial markets have largely priced in a 25 basis
point rate from the central bank next Wednesday, that sentiment
is not unanimous.

“The economic data had something in it for everybody; for
the dreamers who think the economy is just slow enough to put
the Fed on hold, and the pessimists who think growth is still
too hot for the Fed to step away,” said David Carter, managing
director at JPMorgan Private Bank in New York.

“Hope is not an investment strategy, and the economic
facts could soon weigh on the market,” Carter added. “The
biggest uncertainty is what will happen in the back half of this
year.”

Fourth-quarter earnings season has hit full stride, with
more than one fourth of the companies in the S&P 500 having
reported. Of those, 69% have beaten consensus estimates, up from
67% on Wednesday, according to Refinitiv.

Analysts now see aggregate fourth quarter earnings falling
2.7%, worse than the 1.6% year-on-year decline seen on Jan. 1,
but an improvement over the 3% annual decline as of Wednesday,
per Refinitiv.

According to preliminary data, the S&P 500
gained 43.96 points, or 1.09%, to end at 4,060.18 points,
while the Nasdaq Composite gained 199.05 points, or
1.76%, to 11,512.40. The Dow Jones Industrial Average
rose 202.70 points, or 0.60%, to 33,946.54.

Tesla Inc provided one of the heftiest boosts to
the S&P 500, its shares jumping in the wake of its earnings
report.

Chevron Corp announced it would triple its budget
for share buybacks, which sent the oil major’s stock higher.

Among losers, IBM Corp fell in the wake of its
announcement that it would cut jobs divest some assets after
falling short of its annual cash target.

Southwest Airlines Co slid after warning of current
quarter losses.

And despite forecasts of strong demand for air travel in
2023, the broader S&P 1500 Airlines index also ended the session
lower.

That might have something to do with Mastercard Inc’s
disappointing current quarter revenue forecast, cited an
expected diminishing pent-up travel demand. The consumer
payments company’s shares closed lower on the day.

Shares of Bed Bath & Beyond Ink tanked after the
home goods retailer received a default notice from JPMorgan
Chase.

Mastercard rival Visa Inc is due to post results
shortly, as is chip bellwether Intel Corp.
(Reporting by Stephen Culp; Additional reporting by Johann M
Cherian and Shreyashi Sanyal in Bengaluru; Editing by Aurora
Ellis)