Market Rally as Economy Shows Resilience

(Bloomberg) -- Stocks advanced after data revealed the strength of the world's largest economy, providing optimism for corporate performance.

Technology giants led gains on Thursday, spearheaded by Tesla Inc. and Meta Platforms Inc. Microsoft Corp. slipped after announcing slower cloud-computing growth. Apple Inc. is anticipated to release earnings after the closing bell. United Parcel Service Inc. plunged 13% due to a disappointing revenue forecast.

According to Thursday's initial estimate from the government, real gross domestic product grew at an annualized rate of 2.3% in the fourth quarter, moderating from 3.1% in the previous quarter. Economists surveyed by Bloomberg projected 2.6% growth.

"The economy is doing just fine," said Neil Birrell of Premier Miton Investors, despite the data's retrospective nature.

"The economy is on firm footing heading into 2025, which should support risk assets due to the strong correlation between economic growth and corporate profits," added Josh Jamner of ClearBridge Investments.

The S&P 500 rose 0.4%, the Nasdaq 100 climbed 0.5%, and the Dow Jones Industrial Average remained mostly unchanged. The 10-year Treasury yield declined one basis point to 4.52%, while the Bloomberg Dollar Spot Index fell 0.3%.

Eurozone bonds continued their rally after the European Central Bank's fifth borrowing cost reduction since June.

Corporate Highlights:

* A collision between an American Airlines regional jet and a military helicopter near Washington's Ronald Reagan airport resulted in no survivors, marking one of the deadliest U.S. air disasters in decades.
* Southwest Airlines Co. expects expenses to rise faster than predicted due to significant labor costs, offsetting benefits from robust leisure travel demand.
* United Parcel Service Inc. forecasted annual revenue below expectations, indicating that a predicted recovery in parcel services is not expected this year.
* Tesla Inc. aims to launch its long-anticipated robotaxi service and boost vehicle sales after a year of declining deliveries and profits.
* Microsoft Corp. anticipates continued slow growth in its cloud-computing business, as it faces challenges in constructing sufficient data centers to meet demand for artificial intelligence products.
* Meta Platforms Inc. CEO Mark Zuckerberg expressed confidence in the company's AI strategy, predicting 2025 as a "really big year" for its AI assistant to become the industry leader.
* Caterpillar Inc. warned of slightly lower revenues in 2025 due to demand concerns impacting the heavy equipment industry.
* Mastercard Inc.'s earnings exceeded estimates, demonstrating the company's expansion beyond its traditional payment services into fraud prevention, data analytics, and global money movement.

Key Events:

* Friday: US personal income and spending, PCE inflation, employment cost index

Market Moves:

Stocks:

* S&P 500: +0.4%
* Nasdaq 100: +0.5%
* Dow Jones Industrial Average: Unchanged
* Stoxx Europe 600: +0.6%
* MSCI World Index: +0.5%
* Bloomberg Magnificent 7 Total Return Index: +0.6%
* Russell 2000 Index: +1%

Currencies:

* Bloomberg Dollar Spot Index: -0.3%
* Euro: +0.1% to $1.0435
* British Pound: +0.1% to $1.2466
* Japanese Yen: +0.7% to 154.18 per dollar

Cryptocurrencies:

* Bitcoin: +1% to $104,760.07
* Ether: +3.5% to $3,249.22

Bonds:

* 10-year Treasury yield: -1 basis point to 4.52%
* Germany's 10-year yield: -7 basis points to 2.52%
* Britain's 10-year yield: -7 basis points to 4.56%

Commodities:

* West Texas Intermediate crude: +0.4% to $72.91 a barrel
* Spot gold: +0.9% to $2,784.87 an ounce