Wall St gains on GDP growth, halts 4-day slide
U.S. stocks rose on Thursday, helping the S&P 500 and the Nasdaq halt a four-day rout, as data showing that the U.S. economy grew faster than expected in the third quarter buoyed hopes of a recovery in profits.
Quarterly profits at consumer product companies Procter & Gamble Co
and Colgate-Palmolive Co
Shares of Dow component P&G, which also raised its full-year revenue outlook, gained 3.8 percent to $59.44, while Colgate shares rose 1.8 percent to $79.07. The S&P consumer staples index <.GSPS> gained 1.3 percent.
The government's first estimate of U.S. gross domestic product showed the economy expanded at a 3.5 percent annual rate, suggesting it was emerging from the worst recession in 70 years. The positive quarter was the first after more than a year of contraction by the GDP.
Economists in a Reuters poll last week expected a 3.3 percent gain, although some recent data led many to trim forecasts this week.
We are in the early stages of a recovery process, said Les Satlow, portfolio manager at Cabot Money Management in Salem, Massachusetts. It's a very good thing that GDP is growing quarter-on-quarter, but if this is a V-shaped recovery we are still well below the top left of the V.
The Dow Jones industrial average <.DJI> jumped 191.05 points, or 1.96 percent, to 9,953.74. The Standard & Poor's 500 Index <.SPX> rose 22.25 points, or 2.13 percent, to 1,064.88. The Nasdaq Composite Index <.IXIC> shot up 38.75 points, or 1.88 percent, to 2,098.36.
The data provided fuel for the S&P 500 and the Nasdaq indexes to reverse four days of losses. The S&P 500 is up 57.1 percent from its 12-year closing low of March 9. It has shed 3.2 percent from its post-March peak of October 19.
Weakness in the U.S. dollar also underpinned stocks as the appetite for risk resurfaced.
Gains were widespread, with big manufacturers, technology, financials and the materials sectors all benefiting.
Caterpillar Inc
iPhone maker Apple Inc
Several brokerages raised price targets on Symantec.
Among financials, JPMorgan
Exxon Mobil Corp
But other companies reported results above Wall Street's forecasts, including Kellogg Co
Also on Thursday, data from the Labor Department showed that the number of U.S. workers filing new claims for jobless benefits fell last week, though not by as much as expected.
(Editing by Kenneth Barry)
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