US open: Stocks dip despite upbeat GDP data; Dow pulls away from 20,000 mark
US stocks nudged lower on Thursday despite data indicating the country’s economy was in rude health, as the Dow drifted further away from the 20,000 mark it has been flirting with recently.
The Dow Jones Industrial Average shaved off 0.08% to 19,925.50, the S&P 500 dipped 0.16% to 2,261.66 and the Nasdaq fell 0.2% to 5,460.63 at 1532 GMT, with volumes thinner than usual as we head towards the Christmas break.
The dollar was up 0.11% versus sterling to 0.8104, but was down 0.55% against the euro to 0.9540, and slipped 0.09% versus the yen to 117.44.
“It’s been more Scrooge-stagnation than Santa rally this week, with Thursday’s trading failing to buck this inert trend,” Connor Campbell, financial analyst at Spreadex, said.
“Despite news that the US economy is growing at its fastest pace in two years … the Dow Jones did nothing of note after the bell. In fact it trickled 30 points lower, and now sits closer to 19,900 than it does to that elusive 20,000. It previously seemed guaranteed that the Dow would reach that record level before 2016 was over now, however things are far less certain, especially with only a handful of trading sessions left before the new year.”
The US economy grew more than expected in the third quarter, marking its strongest quarterly pace of growth in two years, according to the Commerce Department.
Gross domestic product grew at an annual rate of 3.5%, up from an earlier estimate of 3.2% and compared to 1.4% growth in the second quarter. Economists had been expecting GDP to be revised up to 3.3%.
Consumer spending – which makes up more than two-thirds of economic activity – rose at an annual rate of 3%, up from the previous estimate of 2.8%, while business investment was up 1.4% compared to the prior estimate of a 0.1% increase.
It was a less cheery picture on the jobs front, however, with the number of Americans filing for unemployment benefits up more than expected last week. Initial jobless claims were up 21,000 from the previous week’s unrevised level to 275,000, which was more than the 2,000 increase expected by economists.
Elsewhere in Europe, shares in beleaguered Italian lender Banca Monte dei Paschi di Siena fell 2.76%. It failed to pull off a last-ditch rescue plan to secure an anchor investor for its offer of new shares, with the government expected to step in as early as Thursday. Italian daily Il sole 24 reported that the state rescue is likely to be carried out in different stages and will take two to three months to complete.
On Wednesday, Italy's lower house of parliament and Senate approved a government request to borrow up to €20bn to underwrite the country's banking sector.
Meanwhile, oil prices advanced as Brent crude was up 1.19% to $55.12 a barrel, and West Texas Intermediate rose 1.05% to $53.05 at 1522 GMT.
Gold on Comex increased 0.09% to 1,134.20 per troy ounce.
In corporate news, retailer Bed Bath & Beyond dropped 5.2% after its third-quarter earnings late on Wednesday disappointed, while software company Red Hat plunged 13.54% following a disappointing outlook on Wednesday and news that its chief financial officer is stepping down.
Micron Technology surged 13.16% after its first-quarter earnings beat estimates.
WeightWatchers soared 15.49% after an advert showed that Oprah Winfrey lost 40lbs on the diet.