Star-Bulletin news services
GDP, jobless claims
keep stocks rising
NEW YORK >> Wall Street advanced yesterday on news that the economy grew at a much stronger than expected pace in the second quarter and that jobless benefits claims fell for a third week in a row. The market also rose for the month of July, with its standout achiever, the Nasdaq composite index, climbing for a sixth straight month -- a feat not seen in eight years.
The Dow Jones industrial average and the Standard & Poor's 500 index completed a five-month winning stretch, something they hadn't accomplished since 1999. The Russell 2000 index of small-company stocks also was up for the fifth consecutive month.
Upbeat earnings from Exxon Mobil and Procter & Gamble contributed to yesterday's advance, the market's first in four days. Stocks did pull back from sharper gains in the last two hours of trading, a phenomenon that often happens in the last session of the month, when portfolio managers make last-minute adjustments to maximize returns and look good to shareholders.
Still, analysts said investors were enjoying a renewed sense of confidence that the economy is poised for robust growth in the second half of the year.
"What this second-quarter report (on the economy) does is push more people in the camp that believes we do have an economy that is growing and recovering and we will see even stronger growth in the second half," said Brian Bush, director of equity research at Stephens Inc. in Little Rock, Ark.
After climbing as much as 161.35 in earlier trading, the Dow closed up 33.75, or 0.4 percent, at 9,233.80. The gain erased some of the 84.52 lost in the previous three sessions.
The broader market also was higher. The Nasdaq rose 14.11, or 0.8 percent, to 1,735.02, and the S&P advanced 2.82, or 0.3 percent, to 990.31.
The Nasdaq rose 6.9 percent in July, its sixth straight monthly win. The last time the Nasdaq had a streak that long was the 10-month period from December 1994 through September 1995.
For the month, the Dow rose 2.8 percent and the S&P added 1.6 percent. July marked the fifth straight winning month for the two gauges, a feat last seen in the five-month period that ended January 1999. The Russell 2000 gained 6.2 percent.
The price of the Treasury's 10-year note closed down 2532 point, while its yield rose to 4.41 percent from 4.31 percent yesterday. Two-year Treasury notes were down 732 point and yielded 1.74 percent, up from 1.64 percent yesterday.
Wall Street owed yesterday's gains largely to the economic data. The Commerce Department reported that the U.S. economy as measured by gross domestic product grew at an annual rate of 2.4 percent in the second quarter, well ahead of the 1.5 percent pace economists forecast and the 1.4 percent clip seen in each of the previous two quarters.
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