Dow, S&P 500 close at records after solid US growth data

The Dow and S&P 500 powered to fresh records Thursday following solid US growth data, shrugging off big drops in Tesla and Boeing.

The Dow Jones Industrial Average gained 0.6 percent to 38,049.13, while the broad-based S&P 500 gained 0.5 percent to 4,894.16, its fourth straight record close. 

The tech-rich Nasdaq Composite Index added 0.2 percent at 15,510.50.

US economic growth came in at 3.3 percent in the fourth quarter, topping estimates, fueled by a resilient jobs market and consumer spending, the Commerce Department said.

The latest growth data strengthens optimism that America is achieving a "soft landing," where inflation comes down on higher interest rates, without triggering a recession.

"Most economists would have thought by now, we would have felt the full effects of the rate increases that the Federal Reserve put in place," said Tom Cahill of Ventura Wealth Management.

"So I think that the soft landing scenario is becoming more and more likely."

IBM led the Dow, surging nearly 10 percent after topping earnings estimates and projecting 2024 free cash flow that also exceeded expectations.

American Airlines also had a good day, rising more than 10 percent as it reported better than expected earnings. The company had record annual revenues of around $53 billion.

But Tesla sank more than 12 percent as Elon Musk's electric car company missed earnings estimates in the fourth quarter and projected slower vehicle growth in 2024.

Boeing dropped 5.7 percent after the Federal Aviation Administration said it would limit the production growth plan of the 737 MAX until the company improves quality control, after the mid-flight blowout of a panel on a MAX 9 Alaska Airlines jet earlier this month.