US GDP grows 3.5%

[jimmy olsen]

Is this the begining of a real turn around?

http://online.wsj.com/article/BT-CO-20091029-718416.html?mod=rss_Global_Stocks

OCTOBER 29, 2009, 2:37 P.M. ET

US Stocks Rally Continues; Financials, Materials Strong
By Geoffrey Rogow and Donna Kardos Yesalavich

   Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones) -- U.S. stocks continued to trade sharply higher Thursday as a bigger-than-expected expansion for the U.S. economy in the third quarter sparked buying in a wave of riskier assets.

The Dow Jones Industrial Average recently gained 161 points, or 1.6%, to 9923. The Dow, which has posted three triple-digit losses in four sessions, has traded up 100 points or more for much of the session.

Gains for the blue-chip index were led by Alcoa, Caterpillar and Procter & Gamble. Alcoa surged 8.6% and Caterpillar gained 4.3%, wiping out their Wednesday drops. P&G climbed 4.2% as its fiscal first-quarter earnings exceeded its forecasts and the consumer-products giant boosted its sales forecast for the year.

Financials were also strong, including American Express, up 4.4%. The move for financials comes after that sector and others perceived as risky faced steady pressure in the last four sessions. Other areas hit hard in recent days included small stocks, emerging-market funds and commodities prices, while buying in the dollar and Treasurys picked up. That trend reversed on Thursday as the government's first estimate on third-quarter gross domestic product rose at a seasonally adjusted 3.5% annual rate in July through September. The growth was driven by consumer spending, which rose 3.4% in the third quarter.

Traders said the GDP figure eased some of the economic fears that had driven investors out of riskier assets. The small-stock Russell 2000 index recently gained 2.2%, while crude oil increased $2.72 to $80.18 a barrel.

Another sign of the renewed risk tolerance was damped demand for a mid-afternoon seven-year note auction. Bond prices hit session lows following the auction, in which demand was lower than in the $44 billion two-year note auction and $41 billion five-year note sales earlier this week.

The S&P 500, which had declined for four straight sessions, rose 1.8% to 1062, led by its materials and financial sectors, which gained 3% each. The Nasdaq Composite Index, which was also hard-hit earlier this week as investors shied from riskier investments, rose 1.6%.

Stocks' broad slump earlier this week came as investors focused on disappointing data on housing, durable goods and consumer sentiment. These worries sent the CBOE Market Volatility Index, or VIX, surging this week, but it dropped 10% in recent Wednesday trading.

While stocks gained and volatility declined, there remained some in the market not ready to shrug off the early week reports just yet.

"We've been on the cautious side as the market is still ahead of the economy," said Bill Quinn, chief executive of American Beacon Advisors. "Until you see unemployment subside, there are still concerns about the economy and the consumer."

On the employment front, weekly jobless claims were a bit disappointing Thursday declining by a smaller-than-expected amount.

After moving higher against the euro for much of the week, the dollar recently fell against the euro and rose against the yen.

[Jaron]

*deep breath*


OBAAAMA!

[ulmont]

Is this the begining of a real turn around?

I doubt it.

2.36 percentage points of the 3.5 percent third-quarter growth in GDP came from consumer spending. Car sales alone represented 1 percentage point of total growth, reflecting the success of the government's Cash for Clunkers program.

You can only buy so many cars.

[Razgovory]

Hans said this wouldn't happen so It didn't.

[viper37]

You can only buy so many cars.

It's the scrap program, where they give you some money if you recycle your old car and buy a new one, combined with the very low prices for the new ones.
This is temporary.
The rest, I really can't say.

[DisturbedPervert]

Bush's economic plan finally paying off

[Jaron]

Bush's economic plan finally paying off

[derspiess]

Semi-related, I opened my wife's 401k statement today & saw that the rate of return for last quarter was over 19%.  Looks like my re-shuffling of most of her stuff towards that International Securities Fund did the trick. 

Showed it to her when she got home & she asked if that was good or bad

[Valmy]

*deep breath*


OBAAAMA!

Obamanomics?

[Richard Hakluyt]

It's good news but not as good as "US GDP grows 3.5%", since the 3.5% is the annualised rate, ie the first estimate is that GDP rose by something between 0.8 and 0.9% in the 3rd quarter.

[alfred russel]

Semi-related, I opened my wife's 401k statement today & saw that the rate of return for last quarter was over 19%.  Looks like my re-shuffling of most of her stuff towards that International Securities Fund did the trick. 

Showed it to her when she got home & she asked if that was good or bad

Being from Argentina, she may have seen times when 19% was bad with the inflation.   

[derspiess]

Being from Argentina, she may have seen times when 19% was bad with the inflation.  

  Yeah, but I don't think she's ever bothered looking at anything related to investing.  Unless it's "investing" in a new pair of shoes or a kitchen appliance that is out of our price range...

[Faeelin]

Mission accomplished!

[MadImmortalMan]

Is there anything in here that's not related to government spending? I wonder if this is all just that big deficit we just took on making its way through the economy.

When the economy starts growing on it's own, Tim can start his cheerleading again.

[DGuller]

Bush's economic plan finally paying off