Closing Update: Unexpected 4.1% Rise in Q3 GDP Carries Markets to Outsized Gains

By Staff,

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Stocks rose briskly Friday although ended off the day's best levels but finishing their best week since June. The Dow Jones Industrial Average and the S&P 500 both close at record highs and gain for the week after an unexpectedly large final revision upward in Q3 GDP. Gains were broad-based, with all 10 sectors in the S&P 500 ending on positive ground led by shares of technology and industrial companies.

Wall Street extended its post-FOMC advance today after the final revision to Q3 gross domestic production found the U.S. economy growing faster than market expectations. The Bureau of Economic Analysis reported a 4.1% growth rate during the three months ended Sept. 30, up from an initial revision of 3.6% growth. Business investment and consumer spending supported the increase although much of the rise in consumer spending was due to higher to fuel and healthcare costs. Businesses also continued to replenish inventories at a rapid pace, possibly setting up a disappointing Q1 as companies begin to work through their recent buildups.

Other data this morning was not as bullish, with corporate profits slowing slightly to a 5.6% pace during Q3 compared to 5.8% in the previous quarter. The Kansas City Fed manufacturing index, meanwhile, contracted to a negative 3.0 reading this month from a positive 7.0 November reading.

Crude oil for February delivery settled 12 cents higher at $99.16 per barrel while January natural gas slipped 6 cents to $4.40 per 1 million BTU. February gold rebounded from its steep dive Thursday, adding $10.20 to close again above $1,200 at $1,203.80 per ounce. March silver rose 27 cents to $19.45 while March copper advanced 2 cents to settle at $3.31.

Here's where the markets stood at end-of-day:

Dow Jones Industrial Average up 42 (+0.3%) to 16221

S&P 500 up 8.76 (+0.5%) to 1818

Nasdaq Composite Index up 46.61 (+1.2%) to 4,104.74


Nikkei 225 Index up 0.07%

Hang Seng Index down 0.33%

Shanghai China Composite Index down 2.02%

FTSE 100 Index up 0.33%


(+) JNY, Agrees to $2.2-bln buyout offer from Sycamore Partners, including assumed debt, with shareholders receiving $15 in cash for each share they now own - a 19% premium over its share price prior to it saying April 12 it was considering a deal.

(+) RHT, Q3 earnings of $0.42 per share, ex items, beat analyst expectations by $0.07. Revenue climbs 15.4% year over year to $396.5 mln, topping the Capital IQ consensus by around $13.44 mln. Issues upside Q4 guidance.

(+) JAZZ, Buys Gentium SpA ( GENT ) for $1 bln, acquiring the Italian biotech's Defitelio medication, the first drug approved in Europe to treat blocked veins in the liver caused by cancer therapies given prior to stem cell transplants. GENT is up 2.6%.


(-) NAVB, Said the European Medicines Agency will continue its assessment of the company's application for marketing authorization for its Lymphoseek injection used in lymphatic mapping procedures in patients with head and neck cancer.

(-) NKE, Shares decline after athletic wear company posts fiscal EPS of $0.59, beating consensus estimates by $0.01 per share although was looking for $0.60. Revenue rises 8% to $6.43 bln but narrowly trails Street view by $10 mln.

(-) TIBX, Seees Q1 EPS of $0.17 to $0.18, ex items, missing expectations by at least $0.03 per share. Revenue is projected in a range of $247 mln to $253 mln, or at least $2.3 mln below estimates. Q4 license revenue also disappoints.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing Commodities
Referenced Stocks: GENT

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