Market Roundup: Stocks Surge, Tesla Tumbles, Apple Opens App Store in Europe, Lagarde’s Leadership Questioned
In a tumultuous trading session marked by contrasting fortunes, U.S. equity markets closed higher on Thursday, lifted by robust economic data, while Tesla’s stock plummeted on disappointing earnings and cautious guidance. Meanwhile, Apple made a significant move in Europe, and ECB President Christine Lagarde addressed criticism of her leadership.
U.S. Stocks End Higher Amid Strong GDP Data
U.S. stocks ended the day on a positive note, buoyed by better-than-expected fourth-quarter GDP figures. The Dow Jones Industrial Average gained 0.6%, reaching 34,364.60 points, while the S&P 500 index climbed 0.5%, setting a new all-time closing record of 4,026.40 points. The tech-heavy Nasdaq Composite index edged up by 0.2% to 11,604.26 points, despite a sell-off in Tesla shares.
The positive market sentiment was largely attributed to the Commerce Department’s report indicating that the U.S. economy grew at an annualized rate of 2.9% in the fourth quarter, exceeding economists’ estimates of 2.6%. The robust GDP growth was primarily driven by strong consumer spending and a surge in exports.
Tesla Shares Plunge 12% on Earnings Miss and 2024 Outlook
Tesla, the electric vehicle (EV) trailblazer, experienced a sharp 12% decline in its stock value on Thursday, marking its most significant single-day drop in over a year. The sell-off was triggered by the company’s announcement of lower-than-expected earnings and a cautious outlook for 2024.
Tesla reported adjusted earnings per share of $1.19 for the fourth quarter, falling short of analysts’ consensus estimate of $1.33. The company also guided for slower growth in 2024, citing a potential slowdown in demand and rising competition in the EV market.
Additionally, Tesla’s stock faced pressure from several brokerages, which downgraded their price targets for the company. Wedbush Securities lowered its target from $200 to $150, while Morgan Stanley reduced its target from $333 to $250.
Apple to Open iPhone App Store to Competitors in Europe
Apple announced its plans to open up the iPhone App Store to competitors in Europe, signaling a potential shift in the company’s tightly controlled app distribution model. This move comes in response to the Digital Markets Act, a new European law that requires large technology companies to open their platforms to third-party app stores and payment systems by March 2023.
The decision marks a significant change for Apple, which has maintained a closed ecosystem for its devices, allowing only apps from its own App Store. The company has long faced criticism for its strict control over the App Store, which has been accused of stifling competition and raising prices for consumers.
Lagarde Responds to Staff Survey Criticism of Her Leadership
Christine Lagarde, President of the European Central Bank (ECB), addressed criticism of her leadership following a union-conducted survey revealing discontent among staff members. The survey, conducted by the ECB Staff Union, found that only 40% of respondents expressed confidence in Lagarde’s leadership, with many expressing concerns about her communication style and management decisions.
Lagarde expressed pride and honor in leading the ECB and acknowledged the union’s concerns. However, she emphasized that the ECB’s internal surveys indicated a positive work environment and a strong sense of mission among employees. Lagarde also highlighted the central bank’s efforts to address the concerns raised in the union survey.
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Conclusion
The global markets witnessed contrasting fortunes this week, with U.S. stocks climbing on strong economic data, while Tesla’s shares tumbled on disappointing earnings and cautious guidance. Apple’s decision to open up the iPhone App Store in Europe marks a significant change in the company’s app distribution strategy, while ECB President Christine Lagarde addressed criticism of her leadership. The PRO section provides valuable insights for investors seeking to navigate China’s complex and evolving markets.