NEW YORK (TheStreet) -- It was a morning of surprises as consumer confidence unexpectedly dropped and third-quarter GDP made an unanticipated jump.
U.S. stocks slipped from session highs on Tuesday after November consumer confidence fell to 88.7, down from 94.1 in October and far lower than economists' forecasts for an increase to 96. Hopes were high that recent declines in oil prices would fuel increased consumer spending.
The data overshadowed better-than-expected revisions to GDP earlier Tuesday. Third-quarter GDP was upwardly revised to 3.9% from an initial reading of 3.5%, topping even the most generous estimates. Economists surveyed by Bloomberg predicted a range of 3% to 3.8% with a consensus of 3.3%.
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"Hearty, positive revisions in nearly all key categories of growth [suggested] the economy was on firmer footing than originally expected at the start of the second half," Sterne Agee's chief economist Lindsey Piegza wrote in a note.
However, this might not be what investors want to hear given that a better economy could trigger the Federal Reserve to raise interest rates sooner than expected. "Good news on GDP was actually negative for equity investors," Chris Gaffney, senior vice president at Everbank, said in a call. "Stronger U.S. economy worries investors in that they believe that interest rates will start rising sooner."
"This report may push the Fed to raise rates a little sooner than what they had planned, although I think they're focusing still on wage inflation. That's going to be the trigger for them to start raising rates," he added.