Nasdaq reversed its earlier gains when Tesla, Inc collapsed. (TSLA) by 8%, while the Dow Jones and S&P 500 cut gains this morning and are now only nominally higher.
Intel Corporation (INTC) has joined Tesla in helping push the Nasdaq lower. Tesla collapsed after the company reported that supply chain problems could hurt production, and CEO Elon Musk said the company may not offer new models this year. Intel shares fell after the chipmaker said production was hurt due to a shortage of parts due to supply chain disruptions.
Major Takeaways
- Stocks were mixed, with the Nasdaq being pushed lower by declines at Tesla and Intel.
- The Dow Jones and S&P 500 have cut previous gains and are now at nominally higher only as investors grapple with the prospect of higher interest rates.
- Investors are assessing how the potential interest rate hike in March will affect future growth and earnings.
Stocks rose this morning after the Commerce Department said the economy grew 6.9% in the fourth quarter, which was more than economists expected. Investors are assessing how the potential interest rate hike in March will affect future growth and earnings.
Dow Inc. shares. (DOW), Seagate Technology Holdings Plc (STX), and ServiceNow, Inc. (NOW) will jump after companies announce better than expected results. Netflix, Inc. shares. (NFLX) is getting following word that billionaire investor Bill Ackman’s hedge fund has bought more than 3 million shares of the streaming service.
Bond yields rose again at noon, with the rate on the 10-year Treasury note being 1.79%, narrower than tomorrow. Oil futures lost their previous gains and traded lower. The dollar remains stronger against the euro, and major cryptocurrencies trade less.
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US Bureau of Economic Analysis
The U.S. economy grew more than expected in the fourth quarter as higher vaccination rates with COVID-19 and other measures taken to recover from the pandemic helped boost consumer spending and investment. in business.
The Commerce Department reported its preliminary estimate of gross domestic product (GDP) showing that the economy expanded at an annual rate of 6.9% in the fourth quarter, more than economists ’forecasts and higher than the 2.3% obtained last year. quarter. In addition, GDP growth for all of 2021 is 5.7%, the largest annual growth since 1984.
The report noted that personal consumption costs rose as Americans spent more on health care, recreation, and transportation. Private inventory investment revenues are registered in both the retail and wholesale trading industries, where the retail sector is dominated by motor vehicle dealers. Exports increased as more goods were shipped overseas, and the easing of restrictions on COVID-19 allowed for expanded overseas travel. Business spending on non -residential fixed investment has also increased.
The economy has had a decline in federal, state, and local government spending, particularly on defense, and an increase in imports (which counts as negative to GDP).
Intel: Stock of the Day
Intel had the worst performing stock on the Dow Jones 30 because the semiconductor giant said increasing production costs would limit earnings in the current quarter. Intel forecasts first -quarter earnings per share (EPS) of $ 0.80, falling short of analysts ’estimates, as manufacturing costs squeeze into gross margins.
CEO Pat Gelsinger indicated that the company remains committed to building its capacity and will “relentlessly implement” that approach. Just last week, Intel announced it was spending $ 20 billion on two chip -making factories in Ohio.
In the fourth quarter, Intel reported non -GAAP revenue rose 4% to $ 19.5 billion and EPS of $ 1.09. Both exceeded expectations. The company credits sales to record performances in its Data Center Group and Internet of Things Group.
Intel also raised its annual dividend to $ 1.46 from $ 1.39. Intel shares are down 6% today, and they are down 12% over the past year.