Here are the most important news items that investors need to start their trading day:
1. It’s the economy
Stocks fell Thursday after the latest U.S. economic data raised concerns about stagflation. The blue-chip Dow slid 375 points for the day, while the S&P 500 and the Nasdaq Composite dropped 0.5% and 0.6%, respectively. U.S. gross domestic product expanded 1.6% in the first quarter, less than expected, while the personal consumption expenditures price index increased at a 3.4% pace, well above the previous quarter’s 1.8% advance. Taken together, investors worried it could mean a combined slowing economic growth and rising inflation. Still, major averages are on track for a winning week, and traders will be watching March’s PCE reading, due Friday morning. Follow live market updates.
2. Alphabet’s first-ever dividend
A sign is posted in front of a Google office on January 30, 2024 in Mountain View, California.
Justin Sullivan | Getty Images
Google parent company Alphabet on Thursday assuaged Wall Street’s concerns about the company’s core ads business and ability to generate profits from AI investments. Alphabet topped analysts’ estimates when it reported first-quarter revenue growth of 15% from the same period a year earlier, with ad sales at YouTube that jumped 20%. As a sign of confidence in the company’s financial position, Alphabet announced its first-ever quarterly dividend of 20 cents per share and plans to repurchase an additional $70 billion in stock. The stock rallied about 12% in extended trading, pushing Alphabet’s market cap past $2 trillion.
3. Spending and demand
The Microsoft logo is on display at the Mobile World Congress in Barcelona, Spain, on February 26, 2024.
Charlie Perez | Nurphoto | Getty Images
4. Media merger
The Paramount logo is seen on a building in Los Angeles on Nov. 13, 2023.
Nurphoto| Getty Images
5. Open to changes?
A Southwest Airlines plane lands at San Francisco International Airport (SFO) in San Francisco, California, United States on February 8, 2024.
Tayfun Coskun | Anadolu | Getty Images
Southwest Airlines has long been known for its single-class, open-seating policy that sets it apart from most other major U.S. airlines. But CEO Bob Jordan told CNBC on Thursday that the airline is considering changing that. “We’re looking into new initiatives, things like the way we seat and board our aircraft,” he said while noting no decisions have been made yet. Analysts in the past have asked about charging for premium seating or additional fees, as airline rivals have touted high revenue growth for premium seating such as business class and strong upsell rates. Ryan Green, the carrier’s chief commercial officer, said on Southwest’s earnings call that the carrier is not considering charging for checked bags because “people choose Southwest Airlines because we don’t have bag fees.”
— CNBC’s Yun Li, Brian Evans, Jennifer Elias, Jordan Novet, Alex Sherman and Leslie Josephs contributed to this report.
— Follow broader market action like a pro on CNBC Pro.