Closing Update: Stocks Rise After Q4 GDP Revision, Strong Earning Point to More Growth
Stocks rebounded Thursday from yesterday's steep decline, with all three of the major market gauges posting gains after revised GDP data provided new evidence that the U.S. economy is still strengthening. Better-than-expected earnings by Facebook ( FB ) as well as Dow components 3M ( MMM ) and Visa ( V ) contributed to the bullish sentiment as investors set aside worries about turmoil in emerging market and another reduction in U.S. monetary stimulus from the Federal Reserve.
Fourth-quarter GDP was revised lower from initial estimates, falling to 3.2% from 4.1% but still beating market estimates looking for 3.0% GDP. Investors were buoyed by several components of the index showing strong gains, including consumer and business spending, exports and inventories. The only segment that was relatively sluggish during Q4 was housing, which was hurt by rising interest rate and extreme winter weather late last year.
Initial jobless claims jumped 19,000 during the latest survey week to 348,000 new claims, well above estimates of 330,000, but remained at a level consistent with moderate labor market growth.
Pending home sales were also bearish, plunging 8.7% in December compared with the market consensus expecting a much more moderate 0.1% decline.
Crude oil for March delivery 95 cents to $98.25 per barrel. March natural gas plunged 41 cents, or about 7.5%, settling at $5.02 per 1 million BTU giving back nearly all of yesterday's advance after government data showed a slightly smaller drop in inventories last week than was expected and forecasts for warming weather in many parts of the country.
Metals futures fell. February gold fell $20.01 to settle at $,1241.90 per ounce while March silver slid 42 cents to $19.13 per ounce. March copper was off a penny to $3.23 per pound.
Here's where the major indices closed:
Dow Jones Industrial Average up 19.98 (+1.13%) to 1,794.18
S&P 500 up 19.98 (+1.13%) to 1,794.19
Nasdaq Composite Index up 71.69 (+1.77%) to 4,123.12
Hang Seng Index down 0.48%
Shanghai China Composite Index down 0.82%
FTSE 100 Index down 0.09%
(+) FB, (+14.2%) Social networking firm climbs to new all-time high, receives a slew of price target increases after Q4 non-GAAP earnings of $0.31 per share top estimates by $0.04. Quarterly sales of $2.59 bln beat by $220 mln.
(+) UA, Q4 EPS of $0.59 per share, beating estimates by $0.06. Revenue rises 35% year over year to $682.76 mln, topping the consensus view by $62.83 mln. Raises FY14 guidance, now sees revenue growing 22% to 23%.
(+) ALXN, Reports Q4 earnings of $0.87 per share, ex items, $0.04 better than Street view. Revenue climbs 37.9% year over year to $441.9 mln, topping estimates by $11.23 mln. Guides FY14 EPS, revenue above consensus.
(-) CTXS, (-8.3%) Falls to new 52-week low after Q4 revenue of $802 mln lags Street by $3 mln. EPS of $1.04 tops by $0.06 per share. Q1,FY14 outlook also trail estimates, prompting at least six analyst downgrades today.
(-) ADT, Falls to an all-time low after posting fiscal Q3 earnings, of $0.43 per share, ex items, down from a $0.44 profit last year and trailing Street view by $0.01 per share. Revenue rose 3.7% to $839 mln, missing analyst expectations by $11 mln.
(-) KMT Fiscal Q2 EPS of $0.52 trails expectations by $0.09 per share. Lowers outlook for FY14 earnings but still within Capital IQ consensus.