logo


GDP report drives stocks higher after 4-day slide
Thursday, October 29, 2009 11:55 AM


(Source: Associated Press/AP Online)trackingBy STEPHEN BERNARD and TIM PARADIS

NEW YORK - Investors heartened by news of a stronger-than-expected economy are going back into the stock market after a four-day slide.

The Commerce Department's report Thursday that gross domestic product rose at an annual rate of 3.5 percent in the third quarter is the surest sign yet that the recession has ended , even though problems such as unemployment and weak consumer spending remain.

The strong GDP report is weakening demand for safe-haven assets like Treasurys. A drop in the dollar is pushing commodity prices higher, helping to boost energy and materials stocks.

At midday, the Dow Jones industrial average is up 101 at 9,864. The Standard & Poor's 500 index is up 13 at 1,055, and the Nasdaq composite index is up 27 at 2,087.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

NEW YORK (AP) - Investors heartened by news of a stronger-than-expected economy went back into the stock market after a four-day slide.

The Commerce Department's report Thursday that the gross domestic product rose at an annual rate of 3.5 percent in the third quarter gave the surest sign yet that the recession has ended and the economy is healing, even though problems such as high unemployment and weak consumer spending persist.

The strong GDP report helped to weaken demand for safe-havens like Treasurys. A drop in the dollar pushed commodity prices higher, which helped materials and energy stocks.

The growth came in ahead of the 3.3 percent rise forecast by economists polled by Thomson Reuters. The expansion in GDP was the best in two years and broke four consecutive quarters of declines, the strongest sign yet that the worst recession since the 1930s is over.

The economy was bolstered by government stimulus programs, including the popular Cash for Clunkers auto rebates and tax credits for first-time home buyers. Some analysts worried that the expiration of many of those measures could make it hard to keep GDP growing.

"The question is will it get back on its own sound footing or will it continue to hobble," said Wyatt Crumpler, vice president of asset management at American Beacon Advisor Inc. in Fort Worth, Texas. "We're a bit pessimistic in the short-term."

Crumpler predicts the economy will struggle as consumers try to pay down debt and as credit for small businesses remains tight.

In late morning trading, the Dow Jones industrial average rose 95.45, or 1 percent, to 9,858.14.




(0)
No Comments
Post Comment
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
   
 
 
 
 
   
 

  
Related Press Releases
Advertisement
Popular Articles
Advertisement
Partner Center
Fundamental data is provided by Zacks Investment Research, market data is provided by AlphaTrade. , and Commentary and Press Releases provided by Quotemedia