By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks on Thursday climbed for a
second day, denting weekly losses, as better-than-expected economic
reports trumped the belief that the data increase odds that the
Federal Reserve will scale back bond purchases next month.
The U.S. economy climbed at a more rapid pace in the second
quarter than previously believed, with gross domestic product up
2.5% at an annual rate in the April to June period instead of the
initial read of 1.7%, according to data released by the U.S.
Department of Commerce.
"The stock people are torn between two things. The GDP going up
would normally push stocks higher, but this is the last GDP report
that prints before the Fed meets again," said Chuck Butler,
president, EverBank World Markets.
A separate report had the government's count of those applying
for jobless benefits down by 6,000 to 331,000 last week, with the
four-week moving average up 750 at 331,250, a level that has it
near a five-year low.
After an initial drop of 32 points, the Dow Jones Industrial
Average (DJI) rose as much as 91 points, and was lately up 51.55
points, or 0.3%, at 14,876.06.
Shares of Verizon Communications Inc. (VZ) paced blue-chip
gains, up 2.3%, after Vodafone Group PLC (VOD) said the companies
were in negotiations over their Verizon Wireless venture. Vodafone
surged 7.8%.
Off the Dow, shares of Guess Inc. (GES) leapt nearly 13% after
the apparel manufacturer reported second-quarter profit that beat
expectations.
The S&P 500 index (SPX) added 8.16 points, or 0.5%, to
1,643.11, with telecommunications and consumer discretionary the
best performing and energy and utilities the sole laggards among
its 10 major industry groups.
The Nasdaq Composite (RIXF) gained 35.90 points, or 1%, to
3,629.21.
For every five stocks falling, eight rose on the New York Stock
Exchange, where 319 million shares traded as of 2:50 p.m. Eastern.
Composite volume approached 1.8 billion.
The price of crude retreated from the highest level in more than
two years amid reports that a military strike against Syria might
not be imminent. On the New York Mercantile Exchange, oil futures
for October delivery (CLV3) were off $1.30, or 1.2%, at $108.80 a
barrel.
"The markets have put it (Syria) on the back burner today. One
of the reasons why is the prime minister of the U.K. said an
immediate strike against Syria is not imminent," said Butler, who
believes crude will "eventually settle back down to the high" $90 a
barrel level.
The dollar (DXY) gained against the currencies of major
U.S.trading partners, including the yen (USDJPY) and the euro
(EURUSD). Gold futures (GCZ3) fell $5.90, or 0.4%, to end at
$1,412.90 an ounce.
Longer-term Treasury prices rose, with the yield on the 10-year
note (10_YEAR) used in figuring mortgage rates and other consumer
loans down 1 basis point at 2.758%.
"The 10-year notes made a good recovery from early losses in the
face of the stronger-than-expected GDP revision. I'm thinking the
bond market is finally ready for the long awaited tapering," Elliot
Spar, market strategist at Stifel, Nicolaus & Co., noted in
afternoon commentary.
"However, the action in the interest-sensitive sectors such as
utilities, REITs [real estate investment trusts] and housing are
mixed," Spar added.
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