Day Traders Diary

1/26/23

The major averages are set to rally following fourth-quarter domestic product that came in above expectations, and investors parsed through the latest batch of corporate earnings. The Dow Jones Industrial Average is up 84 points to start the day. The S&P 500 is up 24 points while the Nasdaq is up 134 points.

GDP data released Thursday showed the economy expand at an annualized rate of 2.9% during the fourth quarter, the Commerce Department said. That's above the 2.8% print expected by analysts surveyed by Dow Jones, but represents a slight cooldown from the third-quarter reading.

Meanwhile, earnings season trudged on, with strong Tesla results giving Nasdaq futures a boost. The electric vehicle stock jumped 7% after posting record revenue and solid earnings. IBM dipped 2% despite exceeding expectations.

Airline earnings also rolled out, with Southwest falling on a larger-than-expected loss fueled by its holiday meltdown. American Airlines rose on a fourth-quarter beat.

"Clearly, we're moving through the heart of earnings season at this point," said Bill Northey, senior investment director at U.S. Bank. "There has been some positive news and some less positive news."

Wall Street is coming off a mixed session. The Dow ended Wednesday up 0.03% after dropping more than 400 points earlier. The Nasdaq Composite and S&P 500 dipped just 0.18% and 0.02%, respectively.

Focus now shifts to next week's Federal Reserve policy, where the central bank is widely expected to announce a 25 basis point hike as it battles high inflation. Investors will be on the lookout for clue into how much further the Fed intends to hike before it cuts rates.