Oct. 29, 2009, 9:52 a.m. EDT ·

US Stocks Rise On Better-Than-Expected GDP Data; DJIA Up 43

By Donna Kardos

NEW YORK (MarketWatch) -- U.S. stocks opened higher Thursday after the Commerce Department said the U.S. economy expanded in the third quarter for the first time in more than a year, and by a bigger-than-expected amount.

The Dow Jones Industrial Average was recently up 43 points, or 0.4%, to 9805, led by Procter & Gamble and Alcoa. P&G jumped 4.8% as its fiscal first-quarter earnings exceeded its forecasts and the consumer-products giant boosted its sales forecasts for the year. Alcoa, meanwhile, climbed 4.3%. Exxon Mobil, however, kept the Dow's gains in check, as it slid 2.2% after missing analysts' earnings expectations for the second-straight quarter.

If the Dow is able to hold on to its gains through the close, it would snap the measure's recent losing streak, which had the Dow posting three triple-digit losses in four sessions.

Meanwhile, the S&P 500 gained 0.9%, led by its materials and financial sectors.

The Nasdaq Composite, which was among the hardest-hit measures this week as investors shied away from riskier investments, climbed 1%.

The gains came after the first estimate of third-quarter gross domestic product rose by a higher-than-expected seasonally adjusted 3.5% annual rate July through September. Economists surveyed by Dow Jones Newswires had forecast 3.2% GDP growth during the summer.

The GDP rise was driven by consumer spending, which rose by 3.4% in the third quarter, compared with a 0.9% drop in the April-to-June period. Consumer spending contributed 2.36 percentage points to GDP growth.

"The data is suggesting that the economy does have some strength behind it, and that growth itself is going to be on the higher end of expectations," said Kent Engelke, chief economic strategist at Capitol Securities Management."

Stocks had been in a slump recently as investors seem to grow disenchanted by better-than-expected third-quarter results, instead focusing on disappointing economic data such as the weak housing and durable-goods data reported Wednesday. With the S&P 500 up 54% over the past seven months, market watchers have been growing anxious for more clear signs that the rally in stocks could be justified as well as sustained.

As the fears escalated, the dollar had been moving higher against the euro for much of the week. It fell against the euro in recent trading Thursday, though it did rise against the yen. Also reflecting a reversal of the risk-aversion that had been driving the market earlier this week, Treasurys fell Thursday. Gold and oil futures, meanwhile, gained.

Engelke said the GDP data might have been just what stocks needed to start moving higher again. "This data today is going to give us another opportunity to go back to the highs we had last week," he said.

Still, while the rise in GDP was the first since the second quarter of 2008, and served as an unofficial confirmation that the longest and deepest recession since the Great Depression has ended, the purveyor of the official word on recessions, the National Bureau of Economic Research, has yet to announce an ending date to the slump it said began in December 2007.

Weekly jobless claims, meanwhile, were a bit disappointing Thursday. The initial claims for jobless benefits declined by 1,000 to 530,000 in the week ended Oct. 24. Economists surveyed by Dow Jones Newswires had expected a larger decrease of 6,000 claims.

Still, Engelke said the direction of the weekly jobless claims is still a positive sign.

"We've had four consecutive weeks of claims declining," he pointed out. "That's suggesting we might actually have jobs growth in December."

Still to come Thursday is manufacturing data from the Kansas City Fed, set to be released at 11 a.m. EDT.

Emm every u long, it become short. When u short, it become long. Hope this time the same. Hehe

Recent Dow performance not good. Have to improve lah..

Cheers.

handon      ( Date: 28-Oct-2009 23:40) Posted: close long... switch to short..... every indices show advantage in shorting... short BIG BIG.... hehe...