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U.S. stocks rise on GDP data, Twitter IPO in focus; Dow Jones up 0.30%

Published 11/07/2013, 09:46 AM
Updated 11/07/2013, 09:47 AM
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Investing.com - U.S. stocks opened higher on Thursday, after data showed that the U.S. economy grew more than expected in the third quarter and as markets were eyeing Twitter's debut on the stock market.

During early U.S. trade, the Dow Jones Industrial Average rose 0.30%, the S&P 500 index added 0.23%, while the Nasdaq Composite index edged up 0.10%.

The Bureau of Economic Analysis said U.S. gross domestic product grew at a seasonally adjusted annual rate of 2.8% in the three months to September, beating expectations for growth of 2%. The U.S. economy grew by 2.5% in the previous quarter.

The strong data fuelled speculation the Federal Reserve will begin tapering its asset purchase program sooner-than-expected.

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending November 2 declined by 9,000 to a seasonally adjusted 336,000.

Analysts had expected U.S. jobless claims to fall by 10,000 to 335,000 last week from the previous week’s total of 345,000.

Investors were eyeing Twitter's entry on the New York Stock Exchange on Thursday, after the company priced its shares at USD26 each on Wednesday.

The pricing will give the company a market capitalization of about USD18 billion and bring the potential size of the initial public offering to USD2.1 billion.

Among earnings, CBS Corp. was down 1.78% even after reporting late Wednesday a 22% increase in third-quarter profit, helped by sales of shows to streaming services from Netflixand Amazon.com.

Activision Blizzard dropped 0.79% after the video-game publisher posted third-quarter profit that beat market estimates, while the forecast for this quarter fell short.

Qualcomm was also on the downside, plunging 4.24%, after the maker of chips for smartphones forecast fiscal first-quarter sales that may fall short of analysts’ estimates, due to a shift to less-expensive handsets that has lowered chip prices.

Other companies expected to be in focus included Disney, Priceline.com, Groupon and Great Plains Energy, scheduled to report quarterly results later in the day.

Across the Atlantic, European stock markets were higher. The EURO STOXX 50 jumped 0.95%, France’s CAC 40 rallied 1.02%, Germany's DAX surged 1.28%, while Britain's FTSE 100 added 0.12%.

Also Thursday, European Central Bank President Mario Draghi confirmed that the central bank cut its benchmark interest rate to a record low 0.25% from 0.5%, saying the decision was 'in line' with the ECB's forward guidance on interest rate policy from July.

Draghi reiterated that euro zone borrowing costs will remain at their present or lower levels until conditions improve, indicating that further rate cuts are still possible.

The euro zone may experience "a prolonged period of low inflation", Draghi warned, followed by a gradual return back to the bank’s target of close to, but still below 2%.

During the Asian trading session, Hong Kong's Hang Seng Index declined 0.68%, while Japan’s Nikkei 225 Index retreated 0.76%.


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