US stocks jump

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IOL wall street THE PHOTO HOLIC File image

New York - US stocks Friday rallied after the Commerce Department said third-quarter US gross domestic product grew much faster than previously estimated.

About 30 minutes into trade, the Dow Jones Industrial Average jumped 71.02 points (0.44 percent) to 16,250.10.

The broad-based S&P 500 rose 7.69 (0.42 percent) to 1,817.29, while the tech-rich Nasdaq Composite Index increased 20.02 (0.49

percent) to 4,078.15.

The GDP report, the third and final estimate for the July-September quarter, put growth at 4.1 percent instead of the previously estimated 3.6 percent.

Consumer spending that was much stronger than initially believed led the revised estimate, the department said.

The GDP report came two days after the Federal Reserve scaled back its stimulus program after determining that the US economy had improved sufficiently for a modest taper to Fed bond purchases.

The GDP revision “makes the Fed's tapering decision look pretty timely in hindsight,” said analyst Patrick O'Hare.

Dow component Nike fell 1.0 percent after fiscal second-quarter earnings rose 40 percent from a year ago to $537 million.

Canaccord Genuity said the sports apparel manufacturer's results were “fine” but pointed to rising expenses and higher raw material costs as concerns.

BlackBerry rose 1.9 percent to $6.37 per share after reporting a $4.4 billion loss in its third quarter due to a $4.6 billion charge for an inventory write-down and other one-time costs.

The Canadian company announced a five-year strategic partnership with Taiwan-based Foxconn that will initially focus on a smartphone for Indonesia.

Drugstore chain Walgreen advanced 0.9 percent after fiscal first-quarter earnings of 72 cents per share met expectations and revenues of $18.3 billion rose 6 percent compared with last year.

Chief executive Greg Wasson said the company was “generally satisfied” with revenue growth “given the continued soft economy.”

Bond prices rose.

The yield on the 10-year US Treasury slipped to 2.91 percent from 2.93 percent Thursday, while the 30-year fell to 3.86 percent from 3.90 percent.

Bond prices and yields move inversely. - Sapa-AFP

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