U.S. Stocks Rise as Economy Grows Faster Than Estimate
<cite class="byline" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; font-size: 11px; vertical-align: baseline; background-color: transparent; width: 640px; color: rgb(111, 111, 111); display: block; font-style: normal; line-height: 1.3em; position: static !important; background-position: initial initial; background-repeat: initial initial;">By Nick Taborek & Corinne Gretler - Aug 29, 2013 9:54 PM GMT+0800</cite>
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a second day, as data showed the economy expanded at a faster pace in the second quarter and jobless claims fell.
Verizon Communications Inc. added 3.2 percent as Vodafone Group Plc said the companies are in talks over their Verizon Wireless venture. Guess? Inc. (GES) rallied 13 percent after the apparel maker reported second-quarter profit that exceeded analysts’ estimates.
The S&P 500 rose 0.2 percent to 1,638.40 at 9:52 a.m. in New York. The Dow Jones Industrial Average gained 30.26 points, or 0.2 percent, to 14,854.77. Trading in S&P 500 stocks was 22 percent below the 30-day average at this time of day.
“We’re back to focusing on economic data, specifically out of the U.S. and Europe, and the Fed tapering, as the market is coming around to believe the Syrian conflict poses only a short-term risk,” said Manish Singh, who helps oversee $2 billion as head of investment at Crossbridge Capital in London. “I am of the opinion that tapering will happen in September, regardless of data.”
Gross domestic product rose at a 2.5 percent annualized rate, up from an initial estimate of 1.7 percent, Commerce Department figures showed today in Washington. The median forecast of 79 economists surveyed by Bloomberg projected a 2.2 percent gain.
Jobless claims in the week ended Aug. 24 dropped 6,000 to 331,000 from a revised 337,000 the week before that was higher than initially reported, the Labor Department said today in Washington. The median forecast of 50 economists surveyed by Bloomberg called for a drop to 332,000.
Fed Stimulus
The equity benchmark has fallen 2.8 percent in August amid speculation the Fed will pare stimulus measures and concern the U.S. will take military action against Syria.
Minutes of the Fed’s July meeting released on Aug. 21 showed policy makers supported cuts to the central bank’s bond-buying program this year if the economy improves in line with its forecasts. Fed stimulus helped push the S&P 500 up as much as 153 percent from its March 2009 low, data compiled by Bloomberg show.
The prospect of imminent military strikes on Syria receded as the U.K. and France said they favor waiting for the results of a United Nations investigation into alleged use of chemical weapons. The U.S., which says it has evidence that Syria’s government was responsible, won’t act without allies, Defense Secretary Chuck Hagel said today.
Verizon, Vodafone
Verizon Communications rose 3.2 percent to $48.06. The company is in advanced talks to acquire Vodafone’s 45 percent stake in their Verizon Wireless venture for about $130 billion, people with knowledge of the matter said.
In a statement, Newbury, England-based Vodafone said there’s “no certainty that an agreement will be reached” as it holds discussions with New York-based Verizon. Bob Varettoni, a spokesman for Verizon, declined to comment.
Guess soared 13 percent to $30.84. Second-quarter adjusted earnings per share amounted to 52 cents, exceeding the average estimate of 35 cents in a survey of analysts. The company raised its full-year earnings guidance to $1.78 to $1.92 a share, from a previous prediction of $1.70 to $1.90. Analysts had forecast $1.79.
Campbell Soup Co. fell 3.9 percent to $42.98 after the company reported fourth-quarter sales lower than analysts’ estimates.
To contact the reporters on this story: Nick Taborek in New York at [email protected]; Corinne Gretler in Zurich at [email protected]
To contact the editors responsible for this story: Andrew Rummer at [email protected]; Lynn Thomasson at [email protected]
