Stocks jump on GDP, job data
NEW YORK - Wall Street barreled higher Thursday after a better-than-expected reading on the gross domestic product and a drop in jobless claims gave investors some reassurance that the economy is holding up. The Dow Jones industrial average jumped more than 200 points.
A decline in oil prices also appeared to add force to the rally in stocks. But trading volume was again light heading toward the Labor Day weekend, a condition that can skew price moves.
The Commerce Department's report that gross domestic product rose at an annual rate of 3.3 percent for the April-June period followed several economic readings this week that have left guarded investors somewhat optimistic. The weaker dollar helped boost U.S. exports, which pushed GDP growth beyond the government's initial estimate of 1.9 percent as well as economists' forecast of 2.7 percent.
It marked the economy's best performance since the third quarter of last year, when GDP rose at a 4.8 percent pace.
Economic rebound unlikely to last
WASHINGTON - The economy pulled out of a dangerous rough patch in the spring, thanks largely to strong exports, but the rebound isn't expected to last. Economic slowdowns overseas could make exports tail off just as Americans are hunkering down after the bracing impact of rebate checks wanes, plunging the country into another rut later this year.
'There will be heavy sledding for the U.S. economy during the next couple of quarters,' predicted Lynn Reaser, chief economist at Bank of America's Investment Strategies Group.
Gross domestic product, or GDP, grew at a 3.3 percent annual rate in the April-June quarter, its fastest pace in nearly a year, the Commerce Department reported Thursday. The revised reading was much better than the government's initial estimate of a 1.9 percent pace and exceeded economists' expectations for a 2.7 percent growth rate.
Dell 2Q profit drops 17 percent
Computer maker Dell Inc. said Thursday its fiscal second-quarter profit fell 17 percent, hurt in part by lower prices and restructuring charges. The earnings were short of Wall Street estimates, and Dell shares plunged.
For the three-month period that ended Aug. 1, Dell's earnings dropped to $616 million, or 31 cents per share, from $746 million, or 32 cents per share in the same period last year.