(Bloomberg) -- Stocks rose on signs the main engine of the world’s largest economy remains solid, which bodes well for Corporate America.
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About 420 shares in the S&P 500 advanced after upbeat outlooks from industry heavyweights like Tesla Inc., Meta Platforms Inc. and International Business Machines Corp. Traders are now eagerly awaiting Apple Inc.’s results due after the closing bell. While the majority of companies have so far exceeded Wall Street’s expectations, disappointing forecasts have been met with selloffs, with Microsoft Corp. and United Parcel Service Inc. being the latest examples.
The US economy expanded at a strong pace at the end of 2024, more than offsetting drags from a strike at Boeing Co. and much leaner inventory investment. Consumer spending, which comprises the largest share of economic activity, advanced at a 4.2% pace — the first time since late 2021 that outlays have exceeded 3% in consecutive quarters.
To Neil Birrell at Premier Miton Investors, while the data is all a bit historic now, the economy is “doing just fine.”
“Overall, the economy is on firm footing heading into 2025, which should support risk assets given the strong linkage between economic growth and corporate profits,” said Josh Jamner at ClearBridge Investments.
The S&P 500 added 0.1%. The Nasdaq 100 was little changed. The Dow Jones Industrial Average rose 0.2%. A gauge of the “Magnificent Seven” megacaps fell 0.7%. The Russell 2000 of small firms gained 1.1%.
The yield on 10-year Treasuries was little changed at 4.52%. The Bloomberg Dollar Spot Index fell 0.2%. Gold hit a all-time high. Euro-zone bonds remained higher after the European Central Bank lowered borrowing costs.
Corporate Highlights:
The collision between an American Airlines Group Inc. regional jet and a military helicopter near Ronald Reagan airport in Washington left no survivors on board the two aircraft, authorities said, making it one of the most deadly US air disasters in decades.
Southwest Airlines Co. warned that costs will climb faster than expected as it grapples with heavy labor expenses, undercutting gains from strong demand for leisure travel.
United Parcel Service Inc. projected annual revenue well below expectations, telling investors that a long-awaited rebound in demand for its parcel services won’t arrive this year.
Tesla Inc. plans to launch a long-promised robotaxi business and get back to growing vehicle sales after a year of decline in both deliveries and earnings.
Microsoft Corp. said its cloud-computing business will continue to grow slowly in the current quarter as the company struggles to build enough data centers to handle demand for its artificial intelligence products.
Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg exuded confidence in his company’s artificial intelligence strategy, saying 2025 will be a “really big year” in which its AI assistant will become the most widely used in the industry.
International Business Machines Corp. projected strong revenue growth in the new fiscal year and a jump in AI-related bookings.
Caterpillar Inc. warned that revenues will be “slightly lower” in 2025 as demand concerns weigh on the outlook of the heavy equipment maker.
Mastercard Inc. reported earnings that beat estimates as the firm diversifies beyond its traditional payment network into anti-fraud services, data analysis and global money movement.
Rogers Communications Inc. beat analysts’ fourth-quarter estimates as wireless service revenue gained and subscribers bought more expensive devices.
Cigna Group reported its fourth quarter was hit by surprisingly high costs from plans employers use to cover catastrophic medical claims.
Story Continues
Key events this week:
US personal income & spending, PCE inflation, employment cost index, Friday
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.1% as of 11:25 a.m. New York time
The Nasdaq 100 was little changed
The Dow Jones Industrial Average rose 0.2%
The Stoxx Europe 600 rose 0.9%
The MSCI World Index rose 0.4%
Bloomberg Magnificent 7 Total Return Index fell 0.7%
The Russell 2000 Index rose 1.1%
Currencies
The Bloomberg Dollar Spot Index fell 0.2%
The euro was little changed at $1.0424
The British pound was little changed at $1.2463
The Japanese yen rose 0.6% to 154.32 per dollar
Cryptocurrencies
Bitcoin rose 2.1% to $105,981.83
Ether rose 4.2% to $3,271.93
Bonds
The yield on 10-year Treasuries was little changed at 4.53%
Germany’s 10-year yield declined six basis points to 2.52%
Britain’s 10-year yield declined six basis points to 4.57%
Commodities
West Texas Intermediate crude rose 1% to $73.32 a barrel
Spot gold rose 1.2% to $2,792.26 an ounce
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Margaryta Kirakosian, Allegra Catelli and Divya Patil.
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