Dow's Gain: 199.89 as GDP Wows Wall Street
(Updated with stock prices.)
NEW YORK ( TheStreet) -- A better-than-expected pop in third-quarter GDP pumped stocks Thursday, making up for losses earlier in the week, while oil marched ahead.
The most anticipated data of the week, third-quarter gross domestic product rose at an annual rate of 3.5%, according to the advanced reading. That topped the consensus expectation for 3.2% and a late 2.7% forecast by Goldman Sachs that sent some concern through Wall Street on Wednesday. It was the first rise in GDP since the second quarter of 2008.
The major averages gave the news a warm reception: The Dow Jones Industrial Average added 199.89 points, or 2.1%, to 9962.58, and the S&P 500 rose 23.48 points, or 2.3%, to 1066.11. The Nasdaq advanced 37.94 points, or 1.8%, to 2097.55.Industrials Alcoa (AA) and Caterpillar (CAT) were the best performers on the Dow, rising 8.8% and 5.3%, respectively. Financials were also at the front of the ascent with the KBW Bank index and the NYSE Financial index up 4.1% and 4.4%, respectively. Deutsche Bank (DB) -- which said third-quarter profit more than tripled -- and Credit Suisse (CS) were up 9% and 7.2%, respectively. Dow components American Express (AXP) and Bank of America (BAC) were up 5.1% and 4.8%, respectively. The increase in real GDP in the third quarter primarily reflected positive contributions from personal spending, exports, private inventory investment, federal government spending and residential fixed investment, according to the report. Real personal consumption expenditures increased 3.4% vs. a decrease of 0.9% in the second quarter. That included a 22.3% increase in durable goods and a 23.4% increase in real residential fixed investment, "and the debate is whether that all can be attributed to cash for clunkers and first-time home buyers incentives," says Linda Duessel, equity market strategist at Federated Investors.
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