- POSTED: 21 Dec 2013 05:53
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US stocks bolted to new records on Friday after the Commerce Department reported that US economy grew much faster in the third quarter than previously estimated.
NEW YORK: US stocks bolted to new records on Friday after the Commerce Department reported that US economy grew much faster in the third quarter than previously estimated.
The Dow Jones Industrial Average advanced 42.06 points (0.26 per cent) to finish at 16,221.14, a new record.
The broad-market S&P 500 rose 8.72 (0.48 per cent) to 1,818.32, also a new record, while the tech-rich Nasdaq Composite Index added 46.61 (1.15 per cent) at 4,104.74.
Analysts said investors were cheered after the Commerce Department raised its estimate for third-quarter gross domestic product growth to an annual rate of 4.1 per cent, from 3.6 per cent.
Scott Wren, senior equity analyst at Wells Fargo Advisors, said the GDP increase suggested solid economic growth, but not so strong as to undermine the Federal Reserve's strategy of keeping interest rates low and tapering its bond-purchase program.
"We're still in this modest-growth, modest-inflation economy," Wren said.
Technology companies had a good day, with solid gains at Twitter (+4.4 per cent), Google (+1.3 per cent), Amazon (+1.8 per cent) and Dow component Microsoft (+1.5 per cent). Nasdaq heavyweight Apple rose 0.8 per cent.
Beleaguered smartphone maker BlackBerry surged 15.5 per cent despite reporting a $4.4 billion loss on a large write-down. The Canadian company announced a five-year strategic partnership with Taiwan-based Foxconn that will initially focus on a smartphone for Indonesia.
Societe Generale said the BlackBerry news offered "glimmers of hope" despite the yawning loss.
Information technology giant Oracle fell 0.6 per cent after announcing plans to acquire marketing software company Responsys for $27 per share, or about $1.5 billion. Responsys soared 40.3 per cent to $27.40.
Red Hat, which provides open-source software, jumped 14.5 per cent after earnings rose 50 per cent to $52 million.
Dow component Nike fell 1.2 per cent after fiscal second-quarter earnings rose 40 per cent 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.
Drugstore chain Walgreen advanced 3.7 per cent after fiscal first-quarter earnings of 72 cents per share met expectations and revenues of $18.3 billion rose 6 per cent 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 fell to 2.89 per cent from 2.93 per cent Thursday, while the 30-year fell to 3.82 per cent from 3.90 per cent. Bond prices and yields move inversely.