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Nvidia surges on upbeat sales forecast
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Weekly jobless claims fall
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US GDP grows 2.7% in Q4 vs est of 2.9%
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Futures up: Nasdaq 0.88%, S&P 0.38%, Dow 0.12%
(Adds comment; updates prices, details)
By Johann M Cherian
Feb 23 (Reuters) - U.S. stocks were set for a higher
open on Thursday as a strong sales forecast from Nvidia boosted
chipmakers, although a surprise fall in weekly jobless claims
added to worries that the Federal Reserve will keep raising
interest rates for longer.
Nvidia Corp surged 12.3% in premarket trading 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.
Shares of Broadcom Inc , Qualcomm Inc ,
Intel Corp and Advanced Micro Devices Inc rose
between 1.2% and 4.9%.
Futures cut some gains after data showed the number of
Americans filing new claims for unemployment benefits
unexpectedly fell last week.
"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 that the economy grew solidly in the fourth quarter, though much of the increase in output came from unsold goods at businesses.
Gross domestic product increased at a revised 2.7% annualized rate last quarter, the government said in its second estimate of fourth-quarter GDP. Economists were forecasting a 2.9% rise.
At 8:50 a.m. ET, Dow e-minis were up 39 points, or 0.12%, S&P 500 e-minis were up 15 points, or 0.38%, and Nasdaq 100 e-minis were up 106.25 points, or 0.88%. The benchmark S&P 500 closed lower for a fourth session on Wednesday after minutes from the Fed's meeting showed nearly all policymakers supported more rate hikes but agreed that the shift to smaller-sized hikes would let them calibrate better with incoming data. After a strong January, stock markets have entered a volatile patch as the Fed's struggle to bring inflation within its 2% target, a resilient economy and hawkish commentary by central bank officials have fanned concerns about further rate hikes. Those concerns will be at the back of traders' minds as they assess remarks from Atlanta Fed President Raphael Bostic and San Francisco Fed President Mary Daly later in the day. 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 5.5% after warning of dour demand in the first half of 2023 due to strained consumer spending domestically and in Europe. Moderna Inc fell 4.4% after the vaccine maker reaffirmed its annual sales forecast of $5 billion for its COVID-19 vaccines despite its fourth-quarter sales exceeding estimates. (Reporting by Johann M Cherian and Sruthi Shankar in Bengaluru; Editing by Savio D'Souza and Anil D'Silva)
