Today: Tesla Motors (TSLA) stock jumps more than 15 percent after the carmaker announces better-than-expected fourth-quarter sales and disputes federal agency's claim of a recall. Also: A big day on Wall Street helps Silicon Valley tech firms.
The Lead: Model S sales spark big gains for Tesla on Wall Street
Tesla Motors took to the car world's biggest annual stage Tuesday and showed off fourth-quarter sales numbers that beat expectations, leading to the Palo Alto company's highest stock prices in more than two months even as CEO Elon Musk fought the characterization of a recent move as a "recall."
Speaking at the North American International Auto Show in Detroit, Tesla executive Jerome Guillen said Tesla sold 6,900 Model S sedans in the final three months of 2013, 900 more than the company projected in its most recent quarterly report and more than 25 percent higher than the 5,500 cars Tesla sold in the third quarter. Guillen also said that the electric car maker intends to start producing its next offering -- the Model X SUV -- this year while doubling the number of showrooms and service centers it has in the United States.
"Tesla sales in the fourth quarter of 2013 were the highest in company history by a significant margin," the company said in a corresponding news release.
Investors jumped at the good news, pushing Tesla stock to its highest prices since doubts crept in after the company's third-quarter report in early November. Tesla stock zoomed 15.7 percent higher, gaining $21.93 to $161.27 as Robert W. Baird analyst Ben Kallo upgraded the stock to "Outperform," and reiterated a $187 price target.
"Tesla remains several years ahead of competitors in battery technology and continues to make progress in ramping production and margin improvement," Kallo wrote, later adding, "We think demand for the Model S will remain strong throughout 2014."
Kelley Blue Book senior analyst Karl Brauer agreed, telling Reuters, "As the brand begins global deliveries, the potential for further growth remains high."
While sharing the good news in Detroit, Musk and the company's PR department responded quickly to a National Highway Traffic Safety Administration filing that said Tesla would recall more than 29,000 Model S units. The public filing referred to Tesla's announcement last week of a software upgrade and new power adapters meant to avoid fires such as one that took place in a Southern California garage, a move that the NHTSA officially termed a recall.
"The word 'recall' needs to be recalled," Musk said in a tweet Tuesday, as Tesla's corporate Twitter account echoed similar sentiments.
"It doesn't make sense to call it a recall in this situation, it's an over-the-air update," Musk said later in an interview with CNBC. "It's just not a word that makes sense in the 21st century for the Model S."
The NHTSA is currently investigating a pair of fires involving Tesla's Model S, in which metal road debris punctured the underside of the drivers' electric cars, eventually causing the cars' batteries to catch fire and engulf the cars in flames. Musk has repeatedly defended the cars against any accusations that they are prone to fires, and Tuesday's news release again noted that "Tesla remains the only manufacturer with a perfect safety record of zero deaths or serious, permanent injuries ever."
SV150 market report: Stocks bounce back as PC stocks, Google gain
Wall Street bounced back from its worst day of the young year to post its best performance of 2014 on Tuesday, with Silicon Valley tech stocks such as Intel (INTC) and Google (GOOG) leading the way and boosting the SV150 to a 2.2 percent gain.
Intel joined other chip companies and Silicon Valley firms entrenched in the personal computer industry in gains after JPMorgan analyst Christopher Danely issued a note that focused on "several positive data points in the PC food chain." While noting recent reports that detailed the biggest declines in the history of the PC industry, Danely wrote that "a slew of positive data points after years of decline generally leads to at least a few quarters of stability." Specifically, Danely upgraded Intel to "Overweight" with a $29 price target ahead of the Santa Clara chipmaker's earnings report, due to be released Thursday after the market closes. Rival Advanced Micro Devices jumped 4.1 percent to $4.30 while introducing a new chip aimed at the high-performance market, and Hewlett-Packard (HPQ) moved 2.6 percent higher to $28.85.
Google reached new all-time highs a day after the Mountain View company committed $3.2 billion in cash to the purchase of Palo Alto connected-home company Nest Labs. SunTrust analyst Robert Peck praised the move, calling it "very interesting both financially and in terms of Google's growing computing platform of car, glasses, fiber, tablets, phones and laptops," one of several analyst notes to dwell on the topic Tuesday. Investors also targeted companies similar to Nest, boosting their stock prices as well; San Jose-based Echelon, which offers new-age energy-control devices, had the largest percentage gain in the SV150 on Tuesday, soaring 35.7 percent to $3.08.
Apple (AAPL) enjoyed its strongest one-day gains of 2014 with a 2 percent advance to $546.39 amid reports that it will resuscitate the iPhone 4 as a cheap option for Indian customers. Facebook gained 3.3 percent to $57.74 as Re/Code's Mike Isaac reported that the Menlo Park social network could launch a Flipboard-style news reader this week, and Netflix (NFLX) moved 0.3 percent higher to $337.96 while reportedly plotting expansion in Germany and France. Intuitive Surgical, which has struggled in the past few months, shot 6.8 percent higher to $419.88 after announcing that revenues would be stronger than expected in the Sunnyvale company's upcoming quarterly report.
The SV150 index of Silicon Valley's largest tech companies: Up 32.3, or 2.17 percent, to 1,517.54
The tech-heavy Nasdaq composite index: Up 69.71, or 1.69 percent, to 4,183.02
The blue chip Dow Jones industrial average: Up 115.92, or 0.71 percent, to 16,373.86
And the widely watched Standard & Poor's 500 index: Up 19.68, or 1.08 percent, to 1,838.88
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.