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US open: Stocks extend gains after GDP, Facebook and Visa rise
30-01-2014 14:46
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- US GDP rises 3.2 per cent in Q4, as expected
- Jobless claims, pending home sales miss forecasts
- Facebook, Visa impress with earnings
Dow Jones: 0.37%
Nasdaq: 1.20%
S&P 500: 0.72%
A decent expansion in US economic growth gave stocks on Wall Street a boost on Thursday as markets recovered after some heavy selling the day before following the Federal Reserve's decision to taper stimulus further.
The Nasdaq was outperforming the other benchmarks early on after upbeat earnings from Facebook and Visa, along with decent gains from Google.
The Commerce Department said today US gross domestic product (GDP) expanded in line with forecasts at a 3.2% annualised rate in the fourth quarter, compared to 4.1% in the third quarter.
According to Paul Ashworth, Chief US Economist at Capital Economics, when considering that the three-week government shutdown occurred at the start of the fourth quarter, the 3.2% GDP expansion is "pretty impressive".
"The broader picture is that, as the massive fiscal drag diminishes, US economic growth is accelerating."
Not all economic data today met forecasts though, as the Labour Department released a market report which revealed 19,000 more jobless claims in the week ended January 25th. Weekly initial jobless claims reached 348,000, higher than the consensus forecast of 330,000 and the previous week's 329,000.
Meanwhile, pending home sales fell by a worse-than-expected 8.7% in December as housing-market activity was dampened by the poor weather last month. Analysts were expecting a fall of just 0.3% month-on-month, in line with the 0.3% decline in November.
US stocks slumped on Wednesday with the S&P 500 falling to its lowest level in over two months after the Fed decided to scale its monthly asset purchases by a further $10bn to $65bn after finding that economic growth had "picked up in recent quarters".
Facebook, Visa
Facebook rallied after the social network reported a 63% rise in fourth-quarter revenue to $2.59bn, surpassing analysts' estimates of $2.35bn.
Visa gained as the debt and credit card network reported profit for the first quarter that beat forecasts.
Google was higher after Lenovo Group agreed to buy the Motorola Mobility mobile-phone business from the search engine for $2.91bn.
Potash Corp. declined after it forecast 2014 profit that fell short of market expectations.
West Texas Intermediate futures for March delivery were up $1.137 at $98.48 per barrel.
The yield on a 10-year US Treasury was three basis points higher at 2.71%.
BC
- Jobless claims, pending home sales miss forecasts
- Facebook, Visa impress with earnings
Dow Jones: 0.37%
Nasdaq: 1.20%
S&P 500: 0.72%
A decent expansion in US economic growth gave stocks on Wall Street a boost on Thursday as markets recovered after some heavy selling the day before following the Federal Reserve's decision to taper stimulus further.
The Nasdaq was outperforming the other benchmarks early on after upbeat earnings from Facebook and Visa, along with decent gains from Google.
The Commerce Department said today US gross domestic product (GDP) expanded in line with forecasts at a 3.2% annualised rate in the fourth quarter, compared to 4.1% in the third quarter.
According to Paul Ashworth, Chief US Economist at Capital Economics, when considering that the three-week government shutdown occurred at the start of the fourth quarter, the 3.2% GDP expansion is "pretty impressive".
"The broader picture is that, as the massive fiscal drag diminishes, US economic growth is accelerating."
Not all economic data today met forecasts though, as the Labour Department released a market report which revealed 19,000 more jobless claims in the week ended January 25th. Weekly initial jobless claims reached 348,000, higher than the consensus forecast of 330,000 and the previous week's 329,000.
Meanwhile, pending home sales fell by a worse-than-expected 8.7% in December as housing-market activity was dampened by the poor weather last month. Analysts were expecting a fall of just 0.3% month-on-month, in line with the 0.3% decline in November.
US stocks slumped on Wednesday with the S&P 500 falling to its lowest level in over two months after the Fed decided to scale its monthly asset purchases by a further $10bn to $65bn after finding that economic growth had "picked up in recent quarters".
Facebook, Visa
Facebook rallied after the social network reported a 63% rise in fourth-quarter revenue to $2.59bn, surpassing analysts' estimates of $2.35bn.
Visa gained as the debt and credit card network reported profit for the first quarter that beat forecasts.
Google was higher after Lenovo Group agreed to buy the Motorola Mobility mobile-phone business from the search engine for $2.91bn.
Potash Corp. declined after it forecast 2014 profit that fell short of market expectations.
West Texas Intermediate futures for March delivery were up $1.137 at $98.48 per barrel.
The yield on a 10-year US Treasury was three basis points higher at 2.71%.
BC
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