- US stocks rose as investors weighed strong third-quarter earnings against slower economic growth.
- GDP expanded by 2% in the third quarter, down from 6.7% growth in the second quarter and below forecasts for 2.7%.
- The yield on 10-year U.S. Treasury notes rose to 1.566% from Wednesday’s 1.528%.
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US stocks rose on Thursday as investors weighed strong third-quarter earnings against slower economic growth.
Apple will look to keep the streak of strong earnings news going when it reports Thursday after the close. The iPhone maker is neck and neck with Microsoft as the most valuable company in the world. E-commerce giant Amazon will report late Thursday as well.
The benchmark S&P 500 edged higher, a day after the index retreated from the record highs reached earlier in the week. Meanwhile, the Dow Jones Industrial Average and the tech-heavy Nasdaq-100 both edged up as well.
Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Thursday:
- S&P 500: 4,574.04, up 0.49%
- Dow Jones Industrial Average: 35,660.87, up 0.42%
- Nasdaq Composite: 15,309.32, up 0.48%
US economic output grew less than expected in the third quarter as the recovery fell to its slowest pace since the pandemic began as the Delta variant continued to drag economic recovery.
Gross domestic product grew at an annualized rate of 2.0% over the three months that ended in September, slower than the expected 2.7% rate expected by Bloomberg economists.
This pace marked the slowest growth since the first quarter of 2020, during the initial fallout from the COVID crisis. It also shows a sharp deceleration from the second quarter’s annualized growth rate of 6.7%.
The numbers disappointed many analysts, including Chris Zaccarelli, CIO at Independent Advisor Alliance. He said it should reignite the growth slowdown debate in the midst of inflation continuing to run much higher than average.
“It was to be expected that growth would slow down, as the US economy can’t sustain 6% or higher growth for long, but to drop all the way back to 2% is disappointing,” he said in a Thursday note.
But he did add that as long as the economy continues to reopen – people going to the office, Americans resuming travel, and consumers increasing sending patterns – then the economy can continue to grow, and “earnings growth can allow stocks to grow into their valuations.”
The yield on 10-year U.S. Treasury notes rose to 1.566% from Wednesday’s 1.528%. Yields and bond prices move in inversely.
In cryptocurrencies, dogecoin spin-off shiba inu coin continued its record run, gaining as much as 60% to hit a new high of $0.00008616 on Wednesday, according to CoinMarketCap data. Its gains have made it the eighth-biggest cryptocurrency as it overtook dogecoin in market value.
Gold is trading just slightly higher by 0.08%, to $1,798.10 per ounce.
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