US stocks rise after strong GDP release; Humana slumps on rising costs

investing.com:

Investing.com — U.S. stocks rose Thursday, boosted by stronger-than-expected economic growth while investors digested a deluge of corporate earnings.

By 09:45 ET (14:45 GMT), the Dow Jones Industrial Average was up 85 points, or 0.2%, the S&P 500 traded 17 points, or 0.4%, higher and the Nasdaq Composite climbed 45 points, or 0.3%.

Economic data released earlier Thursday showed that the U.S. economy grew at a faster than anticipated rate in the fourth quarter, as activity remained robust even as it shows signs of slowing back down to a pre-pandemic pace.

Real gross domestic product in the world's largest economy expanded at an annual rate of 3.3% in the three months to the end of December, decelerating from 4.9% in the third quarter, according to a key first reading from the Commerce Department. This was considerably above the 2.0% growth expected.

The recent rally in stocks has been partly fueled by expectations that the Federal Reserve will shortly start cutting interest rates, judging that its rate-hiking campaign has had the desired impact cooling inflation. Although this sign of economic resilience may suggest that the Fed holds off cutting rates until the second quarter, it does suggest that a steep economic downturn is now unlikely.

The earnings season is now in full flow.

Humana (NYSE:HUM) stock slumped 11% after the health insurer warned an «unprecedented» increase in medical costs will hit its earnings this year, and has also put its 2025 profit target out of reach.

American Airlines (NASDAQ:AAL) stock rose over 6% after the carrier beat expectations with its forecast for full-year adjusted earnings per share, expecting that it would receive a boost from solid passenger booking trends and a decline in fuel