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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.

 

long sure win.... hehe... 

 

Good news.. bought some today... likely to earn some pockets money tomorrow

 

GDP Rises 3.5%, Topping Expectations; Jobless Claims Fall by 1,000 to 530,000

 

Oct. 29 (Bloomberg) -- The U.S. economy probably grew in the third quarter for the first time in more than a year, driven by gains in consumer and government spending that have failed to reduce unemployment.

The world’s largest economy expanded at a 3.2 percent annual pace from July through September after shrinking in the previous four quarters, according to the median estimate of 79 economists surveyed by Bloomberg News. Household purchases likely rose by the most since the first three months of 2007.

Policy makers will now focus on whether the recovery, buoyed by federal assistance to the housing and auto industries, can be sustained into next year and create jobs. The record $1.4 trillion budget deficit limits President Barack Obama’s ability to provide further stimulus, while Federal Reserve officials are trying to convince investors that the central bank will exit emergency programs in time to prevent a pickup in inflation.

“At this stage the numbers are just going to tell you the recession is over, and now the argument is going to center on the speed of the recovery,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “There will be a lot of naysayers after the numbers because ‘cash for clunkers’ did figure prominently in the quarter’s bounce back.”

The Commerce Department’s report on gross domestic product is due at 8:30 a.m. in Washington. The economy shrank 3.8 percent in the 12 months to June, the worst performance in seven decades.

Consumers Spend

Consumer spending, which comprises about 70 percent of the economy, probably rose last quarter at a 3.1 percent annual rate from the previous three months, the report may show according to the survey median.

Much of the boost in purchases was provided by the administration’s auto-incentive program known as cash for clunkers, which offered buyers payments of as much as $4,500 to trade in older cars and trucks for new, more fuel-efficient vehicles. The plan, which ended in August, boosted sales by about 700,000 vehicles, according to a Transportation Department estimate.

The improving global economy helped companies from Amazon.com Inc. to Whirlpool Corp. exceed analysts’ sales estimates last quarter. Profits at about 85 percent of the companies in the Standard & Poor’s 500 Index that have released results beat expectations, according to Bloomberg data. That marks the highest proportion in records going back to 1993. The S&P 500 closed at a one-year high on Oct. 19.

Fewer Stockpiles

Growing demand caused inventories to keep falling, which may prompt companies to ramp up production in the coming months and contribute to growth. The drawdown will restrain today’s GDP numbers, economists said.

Orders for durable goods rose 1 percent in September, the Commerce Department said yesterday. The gain was the fourth in the last six months and indicates companies are planning to invest in new equipment.

“You should see more expansion in the categories we’re in, as well as more geographical expansion over time,” Chief Financial Officer Thomas Szkutak of Amazon.com, the world’s largest Internet retailer, said on an Oct. 22 conference call.

The White House’s Council of Economic Advisers estimates the stimulus program, signed into law by President Obama in February, boosted economic growth by 2 percentage points to 3 percentage points in the second quarter, by 3 points to 4 points last quarter and has prevented payrolls from falling even more.

Mounting Unemployment

In September, the unemployment rate reached a 26-year high of 9.8 percent, up from 7.6 percent from when Obama took office in January, figures from the Labor Department show. Economists project the jobless rate will exceed 10 percent by early 2010.

Since the recession began in December 2007, the U.S. has lost 7.2 million jobs. Payroll cuts peaked at 741,000 in January and slowed to 201,000 in August before accelerating again last month.

A report today from the Labor Department, also at 8:30 a.m., may show the number of Americans filing for jobless benefits decreased to 523,000 last week from 531,000 a week earlier, according to the median estimate in a Bloomberg survey.

The economy will likely grow at a 2.4 percent annual rate from October through December, the median forecast in a survey earlier this month showed. GDP will also grow 2.4 percent next year and 2.8 percent in 2011, the survey showed, compared with an average of 3.4 percent growth over the past six decades.

 

Three things now drive the stock market, and they are all related and affect one another:


(1) Economic news

(2) Strength of US dollar

(3) Oil Price

 

Good luck

risktaker      ( Date: 28-Oct-2009 23:03) Posted: Dj gonna go down 9700++ tonight

 

^DJI	30 Industrials	9,762.69 4:03AM SGT	119.48 (1.21%)	Components, More
^DJT	20 Transportation	3,640.35 4:02AM SGT	63.97 (1.73%)	Components, More
^DJU	15 Utilities	366.05 4:05AM SGT	4.35 (1.17%)	Components, More
^DJA	65 Composite	3,276.89 4:04AM SGT	44.92 (1.35%)	Components, More

 

looking at the chart...i would likely buy again when the DOW hits the region around 9400++

 

time to long... sure win.... 9.8 sure stay.... hehe.... 

 

it's looks like on the way to green area

lookcc      ( Date: 28-Oct-2009 23:17) Posted: 97++ or 9800, 2morrow expect red.

 

quit liao.... mind think one way.... heart go the other way.... 

can not work when mind n heart dun agree... hehe.... 

 

stay on guard.... market flipping any time soon.... 

 

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...

 

close long... switch to short..... every indices show advantage in shorting... short BIG BIG.... hehe... 

 

97++ or 9800, 2morrow expect red.

 

9800 thereabt likely.

 

if it really does hit, tml will be a sea of blood..

 

Dj gonna go down 9700++ tonight

 

need 2 view scenaro as it is.