Stocks up on better-than-expected GDP; Visa rallies
U.S. stocks jumped on Thursday, with Visa helping lift the Dow industrials into the green for October, after data showed the U.S. economy grew more than expected last quarter.
"Investors were looking at the GDP number as favorable and confirmation the economy is doing well, or well enough that the Fed should be stepping back," Paul Nolte, senior portfolio manager at Kingsview Asset Management, said of data from the Commerce Department, which found gross domestic product grew at a 3.5 percent annual rate in the third quarter, bolstered by a smaller trade deficit and a rise in defense spending.
Read MoreThird-quarter growth better than expected
"Europe closed well, that helps explain some of the bounce back, and some of it may be month-end performance chasing," said Peter Boockvar, chief market analyst at the Lindsey Group, of Wall Street's afternoon strength.
Boockvar downplayed the notion that headlines about Japan's pension fund allocating money out of Japanese bonds and into equities helped propel the market higher, saying "that was out a week and a half ago, and why does that mean they are going to pile into the U.S. stock market?"
Major U.S. Indexes
| TICKER | COMPANY | NAME | PRICE | CHANGE | %CHANGE |
|---|---|---|---|---|---|
| .DJI | Dow Jones Industrial Average | DJIA | 39,806.77 | -196.82 | -0.49% |
| .IXIC | NASDAQ Composite | NASDAQ | 16,794.87 | +108.91 | +0.65% |
| .SPX | S&P 500 Index | S&P 500 | 5,308.13 | +4.86 | +0.09% |
After a 249-point jump, the Dow Jones Industrial Average gained 221.11 points, or 1.3 percent, to 17,195.42, with Visa pacing blue-chip gains after the card-payment processor reported a better-than-expected adjusted quarterly profit while projecting mobile payments would increase business.
The rose 12.35 points, or 0.6 percent, to 1,994.65, with utilities and health care pacing sector gains that extended to all but the energy sector of its 10 major industry groups.
The Nasdaq rose 16.91 points, or 0.4 percent, to 4,566.14.
For every stock falling, nearly two rose on the New York Stock Exchange, where nearly 767 million shares traded. Composite volume neared 3.6 billion.
On the New York Mercantile Exchange, gold futures fell $26.30, or 2.2 percent, to $1,198.60 an ounce, and crude-oil futures declined 1.3 percent to $81.12 a barrel.
The U.S. dollar climbed against the currencies of major U.S. trading partners, and the yield on the 10-year Treasury note fell a basis point to 2.3061 percent.
"There's still some settling of opinions on the ending of QE," said Nolte, referring to the prior day's announcement by the Federal Reserve that it was ending the bond purchasing program otherwise known as quantitative easing. "The next question is what's next? Investors tend to be much like two-year olds: 'that's done, where is the next piece of my candy coming from?'"
The Fed's announcement on Wednesday had the central bank retaining wording that overnight borrowing costs would stay near zero for a "considerable time," but deleting its characterization of slack in the labor market as "significant."
Thursday's stronger-than-expected reading on U.S. economic growth is "a development somewhat validating the hawkishness in yesterday's Fed statement," Dan Greenhaus, chief strategist at BTIG, noted in emailed commentary
Another report had the number of Americans filing for jobless benefits rising last week, but the four-week average fell, illustrating ongoing improvement in the labor market.
On Wednesday, U.S. stocks fell, a day after the S&P 500 rose to within 2 percent of its record, as Wall Street mulled the ramifications of the widely telegraphed ahead monetary-policy decision from the Federal Reserve.
Coming Up This Week:
Friday
Earnings: Exxon Mobil, Chevron, Sony, A-B InBev, AbbVie, Clorox, BNP Paribas, Madison Square Garden, Pinnacle West, Newell Rubbermaid, Rockwell Collins, NextEra Energy, Charter Communications, Legg Mason, CBOE Holdings, Weyerhaeuser, Teco Energy, Dominion
8:30 a.m.: Personal income and spending
8:30 a.m.: Employment cost index
9:45 a.m.: Chicago PMI
9:55 a.m.: Consumer sentiment
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