The Dow Jones Industrial Average rose 242.74 points, or 0.64 percent, to 38,049.13. The S&P 500 added 25.61 points, or 0.53 percent, to 4,894.16. The Nasdaq Composite Index increased 28.58 points, or 0.18 percent, to 15,510.5.
Nine of the 11 primary S&P 500 sectors ended in green, with energy and communication services leading the gainers by adding 2.23 percent and 1.83 percent, respectively. Meanwhile, consumer discretionary and health led the laggards by dropping 1.05 percent and 0.23 percent, respectively.
The advance estimate for the U.S. gross domestic product (GDP) in the fourth quarter, released on Thursday morning, revealed surprisingly rapid growth. The U.S. economy expanded at an annualized rate of 3.3 percent in the fourth quarter of 2023, significantly outpacing the 2 percent growth rate economists had anticipated.
"Overall, the GDP report was good," said Kevin Gordon, senior investment strategist at Charles Schwab. It was "probably the healthiest mix you could get at this point," he added.
Tesla's quarterly results, which fell short on profits, indicated a "notably" slower growth in electric vehicle production. The company's shares dropped as much as 12 percent during trading, underperforming other leading tech-centric stocks that have fueled the S&P 500's rally.
In the airline sector, American Airlines' stock rose following its issuance of a better-than-expected guidance for 2024. Southwest Airlines exceeded Wall Street's profit expectations for the recent quarter. Alaska Airlines announced an incurred cost of 150 million U.S. dollars due to the recent grounding of its Boeing 737 Max 9 fleet, following an incident involving a door plug mid-flight.
The Federal Aviation Administration (FAA) on Wednesday authorized the 737 Max 9 jets to resume service, provided airlines complete necessary safety checks. However, the FAA also instructed Boeing to halt any planned production increases of this model. This directive is likely to cause disruptions for Boeing's customers and suppliers, contributing to a decline in its shares.
Thursday's surprisingly strong GDP report for the fourth quarter isn't moving the needle when it comes to expectations this year for rate cuts from the Federal Reserve. The yield on the benchmark 10-year U.S. Treasury note was down to 4.132 percent on Thursday, from 4.181 percent on Wednesday. As of Thursday afternoon, fed-funds traders saw a 46.2 percent chance of a quarter-point rate cut in March, and were still mostly clinging to five or six cuts by December 2024, according to the CME FedWatch Tool.
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