Stock averages end up sharply and near the top of the day's range, snapping a four-day slide. The major averages record gains of 2%. The blue-chip DJIA was up by as much as 200 points earlier.
Today's gains are retracing four days of losses that sent the S&P 500 down more than 4% on concerns that the index's seven-month run up wasn't supported by evidence of a recovering economy and fears that central banks would end stimulus plans too soon.
The Commerce Department said gross domestic product, the broadest measure of economic performance, rose at an annual rate of 3.5% in Q3.
In the past year, the economy has contracted 2.3%. The economy shrank 0.7% annualized in the second quarter and 6.4% in the first quarter.
Also reported, weekly jobless claims fell by a smaller-than-expected 1,000 to 530,000. The less-volatile four-week average of new claims saw a bigger decline, falling 6,000 to 526,250. This marked the lowest number since the week ended Jan. 10.
The number of people collecting regular state benefits fell by 148,000 in the week ended Oct. 17 to a seasonally adjusted 5.8 million, the fewest since the week ended March 21.
Bellwethers Procter & Gamble Co (
PG) and Motorola Inc. (
MOT) provided lift after they reported solid quarterly profits. Motorola is up more than 11% out of the gate after forecasting a bigger-than-expected Q4 profit, which overshadowed its relatively small Q3 profit.
Some analysts were quick to note that much of the recovery was driven by government stimulus and that the recovery remains vulnerable without this crutch.
Still, Treasurys fell on the strong GDP report as investors snubbed lower-risk returns for the promise of the stock market. A drop for the dollar raised commodity prices, boosting materials and energy stocks.
Crude oil closes up 3.1% at $79.87 a barrel.
NYSE up 189.6 (2.8%) to 6,955.27.
-DJIA up 199.7 (2.1%) to 9,962.
-S&P 500 up 23.5 (2.2%) to 1,066.
-Nasdaq up 37.9 (1.8%) to 2,098.
GLOBAL SENTIMENT
Hang Seng down 2.28%
Nikkei down 1.83%
FTSE down 0.7%
DOWNSIDE MOVERS
(-) S Q3 loss widens, revenue declines.
(-) FSLR sharply lower in reaction to mixed earnings, guidance last evening.
(-) XOM misses with results.
(-) TSPT may need added safety study for insomnia treatment.
UPSIDE MOVERS
(+) BCRX reports bigger-than-expected Q3 loss, sales beat.
(+) MOT guides above Street for Q4, names new CFO.
(+) AZN raises guidance.
(+) PG beats with Q1 EPS as sales meet, guidance straddles Street.
(+) LYG in talks for alternative to asset protection plan.
(+) BA gets analyst upgrade.
