Stocks Rally on GDP, Jobs Data
08/28/08 - 02:26 PM EDT
Mike Taylor
Updated from 12:22 p.m. EDT
Stocks in New York continued their upward march Thursday following the release of better-than-anticipated GDP data, a bullish economic read that's stoking investor confidence. A decline in the price of crude oil and a decline in unemployment numbers also provided a boost to the markets. The Dow Jones Industrial Average is rising 190 points to 11,692, and the S&P 500 is climbing 11 points to 1293. The Nasdaq is tacking on 24 points to 2406. On the economic-data front, the Bureau of Economic Analysis' second-quarter GDP number was revised upward, assuaging fears that the economy is veering toward reflection. The updated number reflected growth of 3.3% rather than an initial reading of 1.9%. The new figure was well ahead of analysts' forecast of 2.7%. Jobless claims for the week ended Aug. 23 came in at 425,000, in line with expectations and down from 435,000 in the previous week. After the market close Wednesday, struggling mortgage finance company Fannie Mae (FNM Quote - Cramer on FNM - Stock Picks) said it's reorganizing senior management. Fannie and its sister company, Freddie Mac (FRE Quote - Cramer on FRE - Stock Picks), have been at the center of the financial storm stemming from mortgage-related credit losses. Meanwhile, municipal bond insurer MBIA (MBI Quote - Cramer on MBI - Stock Picks), which has suffered after losing its triple-A credit status earlier this year, said it would back $184 billion in bonds for Financial Guaranty. The move, which demonstrates that the company can secure business despite its credit downgrade sent MBIA shares higher. Showing more wear and tear was financial services provider Lehman Brothers (LEH Quote - Cramer on LEH - Stock Picks), which announced it will lay off 1,500 employees, or 6% of its workforce.
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