Wall St climbs after strong GDP data; Tesla drops to 8-month low
By Ankika Biswas and Johann M Cherian
(Reuters) -Wall Street's main indexes gained on Thursday after data reflecting strong economic performance in the fourth quarter boosted hopes of a soft landing, while Tesla (NASDAQ:TSLA)'s growth warning kept a lid on investor enthusiasm.
The economy grew much faster than expected at 3.3% in the quarter on strong consumer spending, defying dire predictions of a recession in 2023 after the Federal Reserve aggressively raised interest rates, according to the Commerce Department's advance report.
«It is supporting that sort of Goldilocks narrative with growth looking pretty strong and the general feeling that inflation is still trending down,» said Chhad Aul, chief investment officer and head of multi-asset solutions at SLGI Asset Management.
Another data showed initial jobless claims for the week ended Jan. 20 rose to 214,000, higher than the estimated 200,000 figure.
At 11:33 a.m. ET, the Dow Jones Industrial Average was up 102.50 points, or 0.27%, at 37,908.89, the S&P 500 was up 22.93 points, or 0.47%, at 4,891.48, and the Nasdaq Composite was up 92.65 points, or 0.60%, at 15,574.57.
However, Tesla skidded 10.5% to an eight-month low and was on track to lose about $50 billion in value after warning of a sharp slowdown in sales growth this year.
The consumer discretionary sector fell 0.9% to a one-week low.
EV makers Rivian (NASDAQ:RIVN) Automotive and Lucid Group (NASDAQ:LCID) also fell 3.3% and 8.0%, respectively.
Tesla's growth warning could fan worries over the rich valuations of heavily weighted megacap companies — also known as the «Magnificent 7» — that have been the key driver of a Wall Street rally since late 2023.
«The rest of the megacap space is still screaming ahead so
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