US close: Markets finish green despite weaker-than-expected data
US stocks finished in the green on Thursday, after a session in which investors mulled a raft of data releases, including a weaker-than-expected reading on economic growth, and signs of progress in Sino-US trade relations.
Dow Jones I.A.
38,368.01
04:30 15/10/20
Nasdaq 100
17,755.47
09:55 29/04/24
The Dow Jones Industrial Average ended up 0.36% at 25,717.46, the S&P 500 added 0.36% to 2,815.44, and the Nasdaq 100 was ahead 0.17% at 7,320.47.
Investors spent much of the day sifting through data which showed that America's economy grew a tad less quickly than expected at the end of last year, as the boost from the Trump administration's tax cuts faded.
According to the Department of Commerce's third estimate for fourth quarter gross domestic product, the US economy expanded at a quarterly annualised pace of 2.2% over the three months to December, down from 3.4% in the previous quarter and versus a previous estimate of 2.6%.
"The slowdown in GDP growth, from 3.4% in the third quarter, is a straightforward story about the end of the kick from tax cuts, which was never going to last long," said Ian Shepherdson at Pantheon Macroeconomics.
"Growth has mean-reverted to the prior trend, though it could easily undershoot in Q1, before rebounding in Q2."
Figures from the National Association of Realtors were also weaker than expected, with the NAR's monthly index down 1% from January to 101.9 last month versus expectations for a 0.5% drop.
The NAR's chief economist, Lawrence Yun, pointed out that the February decline is coming off a solid gain in the previous month.
"In January, pending contracts were up close to 5%, so this month’s 1% drop is not a significant concern,” he said.
“As a whole, these numbers indicate that a cyclical low in sales is in the past but activity is not matching the frenzied pace of last spring."
There was some good news on the macro front, however, as initial jobless claims unexpectedly fell last week.
Claims declined by 5,000 from the previous week's downwardly-revised level to 211,000, beating expectations for an increase to 225,000.
The previous week's level was revised down by 5,000 to 216,000.
Meanwhile, the four-week moving average came in at 217,250, down 3,250 from the previous week's average, which was revised down to 220,500 from 225,000.
“Altogether, we see the initial claims data as consistent with healthy labour market conditions and further evidence that February’s abrupt slowdown in payroll gains is likely to prove transitory,” said analysts at Barclays.
Market participants were also chewing over a Reuters report out earlier suggesting that the US and China have made progress in all areas of trade talks bar enforcement and intellectual property.
Still, Markets.com chief analyst Neil Wilson "we’ll likely need something a little more detailed to really underpin a rally against the backdrop of slumping growth expectations".
Another round of talks between the US and China was due to kick off in Beijing on Thursday.
In corporate news, shares in US auto parts maker WABCO slumped 9.99% after it agreed to be bought by German rival ZF Friedrichshafen for $136.50 a share.
Elsewhere, Facebook was 0.19% weaker after the US Department of Housing and Urban Development charged the company for violating the Fair Housing Act by enabling and causing housing discrimination in advertising on its platforms.
Management consulting firm Accenture was a high riser, adding 5.2% as its second-quarter profit and revenue beat estimates, while Calvin Klein and Tommy Hilfiger parent PVH Corp surged 14.89% on the back of solid fourth-quarter numbers.