Stock futures rise ahead of more earnings, data

US stocks rallied on Thursday as investors digested the release of gross domestic product data and another round of corporate earnings.

The S&P 500 (^GSPC) rose 1.1%, while the Dow Jones Industrial Average (^DJI) added 0.6%. The technology-heavy Nasdaq Composite (^IXIC) rose about 1.8%, led by a more than 10% jump in Tesla (TSLA).

The yield on the benchmark 10-year US Treasury note ticked to 3.497% from 3.461% on Wednesday. The dollar index rose nearly 0.2% to $101.82.

US GDP rose by 2.9% annually in the last quarter of 2022, above expectations, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE), comprising two-thirds of domestic activity, added 2.1%, a drop from the previous quarter’s 2.3%.

Meanwhile, initial jobless claims fell again to 187,000, the lowest level since April 2022. Together, the data provided more signs of resilience for the US economy amid concerns about a potential recession.

New home sales rose 2.3% last month to a seasonally adjusted annual rate of 616,000, according to a report Thursday from the Census Bureau, while mortgage rates fell to 6.13%, according to Freddie Mac.

Thursday’s market moves came after stocks rebounded from Wednesday’s session lows, ending the session nearly flat as 12 of the 24 industry groups hit positive territory for the day.

Shares of Bed Bath and Beyond ( BBBY ) fell on Thursday after the company said in an SEC filing that it doesn’t have enough cash to pay its debts and changed its line of credit with JP Morgan.

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Tesla ( TSLA ) also took center stage on the corporate front as shares rose more than 10% after the company reported strong earnings. Its results show the maker of electric vehicles had better-than-expected profits last quarter, earning $3.7 billion in net income on $24.3 billion in revenue. Tesla announced it will deliver about 1.8 million vehicles this year, representing a 37% jump in production.

International Business Machines Corp. (IBM) has joined the wave of company layoffs, saying it will cut about 3,900 workers. The cuts come from Kyndryl Holdings, the IT services business IBM spun off last year. As a result, the company said it will take a $300 million hit in the first quarter to pay employee compensation costs.

The hybrid cloud and infrastructure company also reported fourth-quarter earnings that came in slightly above analyst expectations with revenue of $16.69 billion. Adjusted earnings per share came in at $3.60, in line with analysts’ forecasts. Shares were down 4% on Thursday.

Facebook parent Meta ( META ) shares moved higher following the news that the company decided to restore former President Donald Trump’s Instagram and Facebook accounts. The end of the ban, which dates from January 6, 2021, uprising comes at the beginning of the 2024 presidential campaign season.

Elsewhere in stock moves, shares of American Airlines ( AAL ) rose on Thursday after the company said it expects profit for this year to exceed forecasts as the industry remains in recovery mode.

Southwest Airlines ( LUV ) shares traded lower after the carrier reported a $220 million loss in the fourth quarter due to its holiday last month, which led to thousands of flight cancellations. Southwest has cut its revenue forecast for this year to $350 million as the company deals with ongoing cancellations and reduced bookings.

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The flight schedule shows canceled Southwest Airlines flights at Pittsburgh International Airport in Pittsburgh, Pennsylvania, U.S., December 29, 2022. REUTERS/Brian Snyder

The flight schedule shows canceled Southwest Airlines flights at Pittsburgh International Airport in Pittsburgh, Pennsylvania, U.S., December 29, 2022. REUTERS/Brian Snyder

Shares of Comcast ( CMCSA ) were flat after the media company reported fourth-quarter earnings that beat expectations with revenue of $30.55 billion. Comcast said it lost 26,000 total broadband customers due to Hurricane Ian, which hit the Southeast coast in September. However, the company was able to turn around, in part by increasing its share of ad spend on its networks during the World Cup and the US election in November.

BuzzFeed ( BZFD ) shares rose after the company said it is using AI tools provided by ChatGPT creator OpenAI to “enhance” and “personalize” its content.

Finally, Toyota chief Akio Toyoda announced on Thursday that he would step down as CEO on April 1 to be replaced by current Chief Branding Officer Koji Sato. Toyoda will be the new chairman of the board.

Investors will continue to digest earnings season, with reports from names including Visa ( V ) and Intel ( INTC ) in the queue for Thursday.

Chevron ( CVX ) is scheduled to report on Friday morning, but previously announced that it will buy back up to $75 billion of its stock in the future.

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With earnings season in full swing this week, 173 companies reported on Wednesday. Among those, six stocks reported an earnings triple play, according to Bespoke Investments. A triple play occurs when a company releases earnings that beat the top and bottom lines while also raising guidance forecasts.

In anticipation of the Federal Reserve’s decision next week, investors and economists received a decision from the Bank of Canada on Wednesday. The central bank raised its benchmark on Wednesday by 25 basis points to 4.5%, the highest level in 15 years. It was a predictable move that came with a clear signal that the bank is ready to press pause on its aggressive cycle.

Bank of Canada Governor Tiff Macklem made it clear that “this is a conditional break”, but it suggests that officials are convinced that the current policy rate is restrictive enough to restore price stability.

Meanwhile, back home, Fed officials are in their blackout period before their next monetary policy meeting, which begins on January 31.

However, the Washington Post reported on Wednesday that Federal Reserve Vice Chairman Lael Brainard is considered a leading candidate to head the National Economic Council at the White House. As it stands, Brainard’s position as governor and vice president currently lasts until 2026.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv

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