Wall Street surges on positive GDP, earnings
2014-01-31 15:41:23
US stocks rebounded strongly Thursday from Wednesday's selloff, as investors weighed the country's upbeat fourth-quarter gross domestic product (GDP) and corporate earnings against worries over emerging markets.
The Dow Jones Industrial Average surged 109.82 points, or 0.70 percent, to 15,848.61. The S&P 500 soared 19.99 points, or 1.13 percent, to 1,794.19. The Nasdaq Composite Index skyrocketed 71.69 points, or 1.77 percent, to 4,123.12.
After the rally, the S&P 500 and the Nasdaq wiped out Wednesday 's losses as the US Federal Reserve decided to scale back its monetary stimulus by another 10 billion US dollars, citing strengthening economic activity in recent quarters.
Wall Street regained momentum amid positive US growth data released in the day, shrugging off continuing pressure in emerging markets.
US real GDP increased at an annual rate of 3.2 percent in the fourth quarter of 2013, according to the advance estimate released by the Commerce Department on Thursday, matching economists' forecasts.
The department attributed the better-than-expected economic growth to positive consumer spending and strong exports.
Other data came out a little bit negative but failed to drag the market lower.
The Labor Department's data showed US initial jobless claims increased by 19,000 to 348,000 in the week ending Jan. 25.
Moreover, US pending home sales, a forward-looking indicator based on contract signings, fell 8.7 percent to 92.4 in December, the lowest level since October 2011, according to the National Association of Realtors.
The association said abnormal weather partly inhibited home shopping in much of the country.
A pair of positive earnings reports from big companies also lifted market sentiment.
Facebook's shares jumped 14.10 percent to 61.08 dollars as both the fourth-quarter earnings and revenues of the social networking company beat market estimates.
Visa's shares also rallied 1.73 percent to 220.88 dollars as the Dow component's quarterly profit climbed thanks to increasing card users.
In other corporate news, Google said Wednesday that it agreed to sell its Motorola mobile-phone business for roughly 2.9 billion dollars to China's Lenovo Group. The tech giant's shares rose 2.57 percent to 1,135.39 dollars.