U.S. stocks move higher, helped by Facebook, GDP
New York • Stocks moved higher Thursday as investors cheered strong earnings from Facebook and an encouraging report that the U.S. economy grew at a robust annual rate of 3.2 percent in the fourth quarter.
KEEPING SCORE: The Dow Jones industrial average rose 132 points, or 0.8 percent, to 15,870 as of 3:15 p.m. Eastern. The Standard & Poor's 500 index rose 23 points, or 1.3 percent, to 1,797, with all ten sectors of the index higher. The Nasdaq composite jumped 81 points, or 2 percent, to 4,133.
INVESTORS 'LIKE' FACEBOOK: Facebook jumped $7.95, or 15 percent, to $61.48. The social media company reported results late Wednesday that exceeded the expectations of financial analysts. Facebook's adjusted profit was 31 cents per share, four cents better than forecast.
OTHER EARNINGS: Visa rose $3.79, or 2 percent, to $220.91 after the company reported a 9 percent rise in first-quarter profits, beating expectations. Alexion Pharmaceuticals was the biggest advancer in the S&P 500, rising $27.74, or 21 percent to $161.47 after the company also beat analysts' expectations and gave a strong 2014 outlook. Alexion is a specialized drug maker focused on rare genetic diseases.
ECONOMIC GROWTH: The U.S. economy grew at a 3.2 percent annual rate in the final three months of 2013, a positive sign for the economy in 2014. Consumer spending, a major driver of the U.S. economy, picked up in the quarter.
TOUGH MONTH: Even with Thursday's gains, it's been a difficult month for investors. The Dow is down 4 percent in January, the worst start to a year since 2009. Emerging markets worries have driven most of the sell-off. A survey last week confirmed that manufacturing in China, the world's second-biggest economy, slowed in January.
"The emerging markets caught a lot of people off guard," said Ian Winer, director of trading at Wedbush Securities. "But at this point, I'm pretty focused on corporate earnings and that's about it. And earnings have been OK, but not all that great. I think we're going lower, and I think (the sell-off this month) is just the beginning."
HANDSET HANDOFF: Google rose $44.03, or 4 percent, to $1,150.91 after the company announced it was selling Motorola's smartphone business to Lenovo for $2.9 billion. Google bought Motorola Mobility for $12.4 billion in 2012, and it has never been profitable for the search giant. The search giant reports its quarterly results after the closing bell Thursday.
BONDS: The yield on the 10-year Treasury note rose to 2.70 percent from 2.68 percent late Wednesday. Bond yields fell to a two-and-a-half month low Wednesday following the Federal Reserve's announcement that it would pull back further on its economic stimulus program.