The Dow Jones Industrial Average and S&P 500 hit all-time intraday highs Thursday, as investors shrugged off a weaker-than-expected rise in second-quarter gross domestic product, focusing on largely upbeat corporate earnings reports and awaiting the trading debut of online brokerage Robinhood Markets.
What are major indexes doing?
The Dow Jones Industrial Average
was up 120.10 points, or 0.3%, at 35,051.03.
The S&P 500
was up 17.28 points, or 0.4%, at 4,417.92.
The Nasdaq Composite
gained 43.14 points, or 0.3%, to trade at 14,805.73.
What’s driving the market?
The Commerce Department said U.S. gross domestic product grew at an annualized pace of 6.5% in the second quarter, falling short of the average forecast of 9.1% produced by a survey of economists by The Wall Street Journal. Separately, data from the Labor Department showed first-time applications for unemployment benefits fell 24,000 last week to 400,000.
“Today’s GDP report is a reminder that perspective is everything. Growth of 6.5% is robust by most measures, but against expectations for an advance of 8.5%, it’s still a disappointment,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
Analysts noted that the expansion was held down by a fall in government spending, Meanwhile, consumer spending, the main engine of the economy, rocketed 11.8% higher in the spring, the GDP data showed. That’s four times faster than the typical increase each quarter.
“The return of household services consumption, from in-restaurant dining to recreation, was a force to be reckoned with in Q2, responsible for the lion’s share of economic gains for the quarter,” said Michael Reynolds, vice president of investment strategy at Glenmede, in emailed comments.
“For a sector that was decimated by a cliff of falling demand for much of the pandemic, it’s encouraging to see meaningful steps along the path of recovery from the services economy,” he said.
While it’s possible the second quarter could indeed mark “peak growth” in economic activity, but it would not necessarily be a “market-shaping event” that investors should fear, Reynolds said.
“The reality is that ‘peak growth’ is a classic early cycle occurrence, typically marking the beginning of a developing and durable economic cycle, as growth settles in at lower (but more sustainable) levels,” he said.
Meanwhile, online brokerage Robinhood Markets
makes its long-awaited debut after pricing its initial public offering at the low end of expectations.
Which companies are in focus?
Trevor Milton, founder of electric truck company Nikola Corp.
was indicted on three counts of fraud by the U.S. Attorney’s Office for the Southern District of New York for making “false and misleading statements” to investors regarding “nearly all aspects of the business,” according to a grand jury indictment that was unsealed on Thursday. Shares fell more than 9%.
Facebook Inc. FB shares were down 4%, as the social media giant, like other technology titans, beat second-quarter earnings estimates but also guided to slowing revenue growth in the second half of the year.
Ford Motor Co.
late Wednesday reported a surprise quarterly profit, saying “strong” demand for its vehicles allowed it to forgo discounts and flagged signs of improvement on chip supplies. Shares rose more than 5%.
shares were up 1.9%, after the company topped expectations with its second-quarter results Thursday amid a continued recovery in spending trends.
earnings more than doubled in the second quarter, and executives said the chip company was significantly improving its access to foundries during a global semiconductor shortage in which capacity constraints have hampered the sector.
What are other markets doing?
The yield on the 10-year Treasury note
edged up 0.6 basis point to 1.268%. Yields and debt prices move in opposite directions.
The ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, fell 0.4%.
In Asia, the Hang Seng
rallied 3.3% on reports Chinese authorities tried to placate top foreign institutions about a wave of regulatory actions. The index reamins down 3.7% for the week. The Shanghai Composite
rose 1.5%, while Japan’s Nikkei 225