Early in the trading day on Thursday, stocks mainly saw a rise but began to recede as the day progressed. The major averages, including the Dow and the Nasdaq, have retreated from their session highs with both momentarily falling below their initial levels.
At present, the major averages reflect humble gains. With an increase of 63.91 points or 0.2 percent, the Dow stands at 37,870.30, while the Nasdaq is up by 18.08 points or 0.1 percent at 15,500.00, and the S&P 500 improved by 12.35 points or 0.3 percent to reach 4,880.90.
The initial momentum on Wall Street emerged following the Commerce Department's report that revealed better than anticipated U.S economic growth and a deceleration in the rate of consumer price growth in the fourth quarter of 2023.
The report detailed that the gross domestic product significantly increased in the fourth quarter by 3.3 percent after a surge of 4.9 percent in the third quarter. Economists had expected GDP to rise by only 2.0 percent.
The unexpectedly robust GDP growth can be partially attributed to an ongoing rise in consumer spending, which ascended by 2.8 percent in the fourth quarter following a 3.1 percent spike in the third quarter.
In terms of inflation, the Commerce Department reported that the personal consumption expenditures price index in the fourth quarter grew by 1.7 percent in comparison to the 2.6 percent surge in the third quarter. Excluding food and energy prices, the PCE price index had a 2.0 percent increase in the fourth quarter, the same rate as in the third quarter.
Jamie Cox, Managing Partner for Harris Financial Group, opined that the leading data showed the ideal blend of robust consumption and decreasing inflation, an encouraging sign for the Federal Reserve looking to lower rates this year.
Adding to this, the Commerce Department also delivered a report revealing that the new orders for U.S. manufactured durable goods remained unchanged in December. This was contrary to economists' expectations for the orders to increase by 1.1 percent.
Initial jobless claims also exceeded the expected jump to 200,000, reaching 214,000, according to a separate report by the Labor Department. This is a 25,000 increase from the revised level of the previous week.
However, as traders await the release of a critical report on personal income and spending on Friday, buying interest seemed to diminish as the session continued.
Among individual stocks, IBM Corp stood out with a significant surge of 10.3 percent following better than expected fourth-quarter results. In contrast, Boeing fell by 6.0 percent after a Bank of America downgrade from Buy to Neutral.
Airlines, oil, and telecom stocks have observed considerable growth. Interest-rate sensitive utilities and commercial real estate stocks also rose significantly, while healthcare and brokerage stocks revealed some weakness.
In international markets, stock markets across the Asia-Pacific region were mainly on the rise, with Japan's Nikkei 225 Index just above the unchanged line. Hong Kong's Hang Seng Index rose by 2.0 percent, and China's Shanghai Composite Index surged by 3.0 percent.
The key European markets witnessed slight increases after the European Central Bank (ECB) decided to retain the existing interest rates. The United Kingdom's FTSE 100 Index registered a marginal increment, while the German DAX Index and the French CAC 40 Index both saw a slight increase of 0.1 percent.
Within the bond market, treasury securities witnessed a significant rise in response to the U.S. economic data. Consequently, the yield on the standard ten-year note, which is inversely proportional to its price, decreased by 4.0 basis points standing at 4.138 percent.
