US open: Markets fluctuate after GDP and claims data

US stocks fluctuated on Thursday after accelerating gross domestic product data led to speculation that the economy might be strong enough for the Federal Reserve to raise interest rates earlier in 2015.

Not long after 10:00 in New York, the Dow Jones Industrial Average was 65.66 points up to 17,039.97, while the S&P 500 lost 4.88 points to 1,977.42 and the Nasdaq was 20.84 points down to 4,069.71

Data released on Thursday showed US real gross domestic product (GDP) rose an annualised 3.5% in the third quarter of 2014, exceeding consensus estimates of a 3.0% rise.

Government spending increased to 4.6%, driven by a 16% rise in federal defence spending, the largest increase in five years, while business investment spending rose 5.5% and real consumer spending advanced slightly more than expected to 1.8%.

“The GDP figure was stronger than expected, the fact that the surprise was in defence spending, which is unlikely to be repeated, leads us not to extrapolate the stronger growth into future quarters,” Barclays said in a note, adding that it expected real GDP growth to be 2.5% in the final quarter of 2014.

Figures published by the Labor Department showed that the number of Americans who applied for new unemployment benefits in October remained below the 300,000 unit for the seventh consecutive week.

In the week ended 25 October, initial jobless claims rose by 3,000 to 287,000, in line with consensus expectations of 285,000, while claims for the previous week were revised to 284,000, as the four-week moving average remained at 281,000, its lowest level since 2000.

In corporate news, Visa rallied after fourth quarter earnings fell less than analysts expectations, while rival Mastercard rose after its third quarter profit and sales also beat analyst estimates.

Lakeland Industries soared as high as 40% after the maker of hazmat suits announced it accelerated manufacturing capacity due to the Ebola crisis.

Take-Two Interactive Software and both rose sharply, the former after reporting losses that were less severe than previously anticipated.

Kraft Food fell after reporting its third quarter profit from $500m to $446m, while Avon Products shares dropped significantly, even though the firm topped analysts’ estimates after positive results in Europe.

The yield on the 10-year US Treasury note fell four basis points to 2.28%, while the yield on the 30-year note fell by the same margin to 3.01 and the five-year Treasuries were unchanged at 1.58.

Gold futures slid to $1,203.20, while West Texas intermediate and Brent crude both retreated and were trading at just over $81 and just over $86 respectively.

The dollar advanced marginally against the euro and the yen but lost ground against the pound.