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Nvidia hits 10-month high on upbeat sales forecast
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Netflix slips on price cuts report
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Weekly jobless claims fall; GDP grows 2.7% in Q4
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Indexes up: Nasdaq 0.56%, S&P 0.59%, Dow 0.42%
(Updates prices, details)
By Johann M Cherian
Feb 23 (Reuters) - U.S. stock indexes climbed on
Thursday as a strong sales forecast from Nvidia boosted
chipmakers and outweighed worries that the Federal Reserve will
keep raising interest rates for longer after data highlighted a
tight labor market.
Nvidia Corp surged 14.3% to a more than 10-month
high after the chip designer forecast quarterly sales above
estimates and reported a surge in the use of its chips to power
artificial intelligence services such as chatbots.
Other chipmakers such as Broadcom Inc , Qualcomm Inc , Intel Corp and Advanced Micro Devices Inc rose between 0.3% and 3.8%. The Philadelphia SE
Semiconductor index jumped 2.7%.
However, further gains were capped by data that showed the
number of Americans filing new claims for unemployment benefits
unexpectedly fell last week, continuing to signal persistently
tight labor market conditions.
"Markets are tracking the earnings reports overnight from
Nvidia," said Robert Pavlik, senior portfolio manager at Dakota
Wealth.
"Investors aren't drawing too much attention to the economic
data we've had and you've got a little bit of a pop in a very
popular stock like Nvidia."
A separate report confirmed the economy grew solidly in the
fourth quarter, though much of the increase in output came from
piling inventory at businesses.
Gross domestic product increased 2.7% at an annualized rate
last quarter, the government said in its second estimate of
fourth-quarter GDP. Economists were forecasting a 2.9% rise.
At 10:10 a.m. ET, the Dow Jones Industrial Average was up 140.33 points, or 0.42%, at 33,185.42, the S&P 500 was up 23.46 points, or 0.59%, at 4,014.51, and the Nasdaq
Composite was up 64.38 points, or 0.56%, at 11,571.45.
Nine of the 11 major S&P 500 sectors gained. But
communication services slid 0.7%, hurt by a 4.6% drop
in Netflix Inc on reports that the entertainment
services firm was cutting subscription prices in 30 countries.
The S&P 500 closed lower for a fourth session on
Wednesday as minutes from the Fed's meeting showed nearly all
policymakers backed rate hikes but agreed the shift to
smaller-sized hikes would let them calibrate better with
incoming data.
After a strong January, stock markets have hit a volatile
patch this month as signs of a resilient economy and hawkish
commentary by central bank officials fanned concerns of more
rate hikes.
Those concerns will be on top of traders' minds as they
assess remarks from Atlanta Fed President Raphael Bostic and San
Francisco Fed President Mary Daly during the session.
Analysts polled by Reuters predict a correction within the
next three months even though they expect the S&P 500 to
climb 5% by year-end.
Among other stocks, eBay Inc slid 5.7% after
warning of dour demand in the first half of 2023 due to strained
consumer spending in the United States and Europe.
Moderna Inc fell 7% after the vaccine maker
reaffirmed its annual sales forecast of $5 billion for its
COVID-19 vaccines despite its fourth-quarter sales exceeding
estimates.
Advancing issues outnumbered decliners by a 3.44-to-1 ratio
on the NYSE and 1.79-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and two new
lows, while the Nasdaq recorded 27 new highs and 45 new lows.
(Reporting by Johann M Cherian and Sruthi Shankar in Bengaluru;
Editing by Savio D'Souza, Anil D'Silva and Arun Koyyur)
