Market Optimism Soars with S&P 500 Rally Following Positive GDP Report

Market optimism continues to surge as indicated by the CNN Money Fear and Greed index which, on Thursday, exhibited a further increase in positive investor sentiment. Despite this, the gauge remained firmly in the 'Extreme Greed' territory.

The upward trend in market confidence was mirrored by a strong performance in U.S. stocks. The S&P 500 achieved gains for a sixth straight day, pushing to new record closing highs.

Notably, Thursday's market saw a mixed reaction to corporate news. Tesla, Inc. (TSLA) experienced a significant drop, with shares falling over 12% in response to the company's quarterly earnings that failed to meet expectations. Conversely, American Airlines Group Inc (AAL) saw its shares climb over 10%, rewarded for earnings that surpassed predictions.

The day's economic data provided a boost, as the U.S. economy reported a 3.3% annual growth in the fourth quarter, outpacing the anticipated 2% rise, yet this was a deceleration from the previous quarter's 4.9% growth rate. Meanwhile, there was a slight uptick in initial jobless claims for the week ending January 20, with an increase of 25,000 bringing the total to 214,000.

In the manufacturing sector, U.S. durable goods orders remained constant in December, presenting no change from previous figures.

Across most sectors, there were gains; energy, communication services, and utilities led the charges by ending the session with the largest gains. On the flip side, consumer discretionary and health care sectors didn't follow the overall positive trend and concluded the trading day in the red.

The Dow Jones finished the day with robust gains, adding approximately 243 points to close at 38,049.13. The S&P 500 rose by 0.53% to a level of 4,894.16, while the Nasdaq Composite saw a modest increase by 0.18%, closing at 15,510.50.

Looking forward, market participants are turning their attention to upcoming earnings reports from major companies including Booz Allen Hamilton Holding Corporation (BAH), Colgate-Palmolive Company (CL), American Express Company (AXP), and Norfolk Southern Corporation (NSC).

Thursday's Fear and Greed Index rating of 77.3, despite showing 'Extreme Greed,' is a minor uptick from the previous reading of 76.

The Fear & Greed Index is implemented to gauge current market emotions. By drawing from seven varied indicators, it assigns a score from 0 to 100 that reflects how greed or fear are influencing the market. A score of 0 implies peak fear, while 100 denotes absolute greed.

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