Stocks stay lower after GDP report

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Stocks are lower this morning, remaining negative after a strong third-quarter growth number.

S&P 500 futures fell about half a percent, while most European indexes are down 1-2 percent. Commodities are also under pressure as the United States dollar appreciates. Asia was mixed overnight.

The Commerce Department announced that gross domestic rose 3.5 percent in the third quarter, better than the 3 percent forecast by economists. It comes just one day after the Federal Reserve ceased monetary stimulus amid "solid job gains" and "a substantial improvement in the outlook for the labor market." That kind of language is consistent with higher interest rates.

Equities had rallied into the Fed's announcement, with the S&P 500 retracing most of its selloff in late September and early October. The big question now facing investors is whether to expect another pullback and further consolidation, especially with major economic reports like the Institute for Supply Management's manufacturing index and non-farm payrolls due next week.

In addition to GDP, weekly jobless claims totaled 287,000, slightly worse than the 283,000 estimate. Today also brought two unexpectedly strong economic reports from Europe as German unemployment shrank and regional sentiment climbed. Both were forecast to worsen.

Energy, materials and miners have been the weakest groups in the last month, according to optionMONSTER's proprietary researchLAB market scanner. Airlines, real-estate investment trusts, car retailers, healthcare and utilities fared the best, while industrials have also shown signs of strength as well.

In company-specific news, Visa rose about 4 percent after reporting better-than-expected profit and revenue yesterday afternoon. Akamai Technologies and JDS Uniphase also beat estimates.

The quarter reports continue this morning with companies such as MasterCard, Cigna, Kellogg, BorgWarner, L-3 Communications, ConocoPhillips and CME. Starbucks, Expedia, Flour, Mylan, and Eastman Chemical follow in the afternoon.

Oil and copper fell about 1 percent, while gold declined nearly 2 percent and silver's decline approached 3 percent. The U.S. dollar gained against every major currency and the Japanese yen rose against the euro--all consistent with a mood of risk-aversion.

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

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing , Options
Referenced Symbols: SPX

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