Stocks finished higher Thursday as Wall Street looked beyond disappointing economic news.
The Dow Jones Industrial Average finished up 153 points, or 0.44%, to 35,084, the S&P 500 rose 0.42, and the Nasdaq climbed 0.11%.
Both the Dow and S&P 500 posted intraday highs.
The yield on the benchmark 10-year Treasury rose Thursday to 1.276%.
Gross domestic product, a measure of all goods and services produced during the April-to-June period, grew 6.5% on an annualized basis, below the forecast of 8.4%.
"A large part of the miss was due to a drawdown in inventories, which means that more of this quarter’s expectations will be realized in future quarters, and the big bright spot was consumer spending," Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance, "which increased at a blistering 11.8% pace, helping to explain the positive reaction from markets today."
In addition to the GDP report, Zaccarelli said, news that there is bipartisan agreement on a new infrastructure package added to the positive feelings about future economic growth.
"We continue to believe that the economy will improve, despite the rise in Covid cases, and expect markets to keep moving higher – albeit with pullbacks and corrections along the way as usual – as corporate profits continue to expand during this business cycle," he said.
The Labor Department said that weekly jobless claims fell by 24,000 to 400,000, down from the previous week’s revised estimate of 424,000 claims. Analysts were forecasting 380,000 claims.
Continuing claims, which track Americans receiving unemployment benefits, rose 3.27 million for the week ending July 17. The median estimate was 3.19 million claims.
Robinhood (HOOD) - Get Robinhood Report shares changed hands at $38 each on their Nasdaq debut Thursday and immediately slumped. The popular, yet controversial, online trading app finished down 8.37%.
Ford Motor (F) - Get Ford Motor Company Report rose after the carmaker lifted its 2021 forecast following a surprise second quarter profit that defied supply constraints linked to the global semiconductor shortage.
Facebook (FB) - Get Facebook, Inc. Class A Report shares slipped after the social media giant posted stronger-than-expected second quarter earnings, but noted that ad revenue growth would slow "significantly" over the second half of the year.
PayPal Holdings (PYPL) - Get PayPal Holdings Inc Report fell after the payments processor offered disappointing guidance for its fiscal third-quarter even as it topped earnings estimates for the second quarter but missed revenue forecasts.
Federal Reserve officials said “the economy has made progress” toward its goals for employment and inflation, indicating changes to the Fed's stimulus could be coming.
But Fed Chairman Jerome Powell said the central bank wasn't ready to begin pulling back on its monthly bond purchases of $120 billion a month.
“We’re not there. And we see ourselves as having some ground to cover to get there,” Powell said Wednesday after the Federal Open Market Committee kept interest rates unchanged at a range near zero.
The Federal Reserve also noted that the path to a sustained economic recovery "depends on the course" of the coronavirus and the pace of vaccinations.