Stock indexes in corrective mode following rally

Thursday's Economic Reports

Thursday morning's GDP report showed a growth of 2.5% annually for the third quarter, according to the Commerce Department's first quarterly estimate. This was greater than the 2.3% anticipated growth rate. The rate stood at 1.3% in the last quarter.

Jobless claims last week fell 2,000 to 402,000, which was slightly less than the 400,000 anticipated, but relatively unchanged from the previous week.

Pending home sales were disappointing, but had little impact upon the day's price action. Sales fell unexpectedly by 4.6% in September after a 1.2% decline in the previous month. Economists had expected sales to remain approximately the same.

On the docket for Friday are September's personal income and spending data, the employment cost index for Q3, and October's consumer confidence.

S&P 500 (Figure 2)

Index Wrap-up

The Dow Jones Industrial Average ($DJI) ended the day on Thursday with a gain of 339.51 points, or 2.9%, and closed at 12,208.55.This was the first time the Dow has been above 12,000 since August 1. All of the Dow's thirty index components posted a gain. Bank of America (BAC) was the strongest percentage performer with a gain of 9.6%.

The S&P 500 ($SPX) finished the session with a gain of 42.59 points, or 3.3%, and closed at 1,284.59. The strongest of the index's industry groups were the financials (+6.2%), materials (+5.3%), industrials (+4.4%), and energy (+3.9%). Morgan Stanley (MS) was up 17%, while Citigroup (C), Goldman Sachs (GS), Bank of America (BAC), and JP Morgan (JPM) all climbed more than 8%. There were no declining groups, but the weakest was consumer staples (+1.3%).

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