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Benchmarks closed in the green on Thursday, boosted by financial shares which surged following the release of strong GDP data. Fourth quarter’s final GDP reading exceeded estimates. An overall increase in consumer spending was accompanied by an increase in corporate profits. Also, initial claims numbers continued to decline. Meanwhile, investors kept a close watch on oil prices which soared on Thursday following Kuwait’s attempt to extend OPEC production cuts.
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The Dow Jones Industrial Average (DJI) gained 0.3% to close at 20,728.49. The S&P 500 rose 0.3% to close at 2,368.06. The tech-laden Nasdaq Composite Index, meantime, closed at 5,914.34, gaining 0.3% to finish at all time high after a month-long wait. The fear-gauge CBOE Volatility Index (VIX) gained 1.3% to settle at 11.57. A total of around 6 billion shares were traded on Thursday lower than the last 20-session average of 6.8 billion shares. Advancers outpaced declining stocks on the NYSE. For 58% stocks that advanced, 38% declined.
Benchmarks Boosted by Growth in GDP
Healthy economic data provided a more positive outlook for the U.S. economy, leading to an improvement in investor sentiment. The U.S. economy registered a growth of 2.1% in the fourth quarter of last year. Gross domestic product (GDP) was revised upward from 1.9% annual rate of growth. Consumer spending, which accounts for more than two-third of the economic activity was revised upward, from 3% to 3.5% for the said quarter. Moreover, corporate profits increased, signifying that the economy has entered 2017 on a strong note.
The rise in GDP was accompanied by a fall in number of applications for unemployment benefits. Jobless claims dropped by 3,000 to 258,000 for the week ended March 25th. New jobless claims have been found to be under the key 300,000 threshold for 108 straight weeks, keeping new claims near the lowest level since the early 1970s.
This upward revision to U.S. economic growth along with healthy labor market data boosted investor confidence. As a result, financials, particularly bank stocks notched up gains. The Financial Select Sector SPDR (XLF) increased 1.3% and was one of the best performing sectors in the S&P 500. Some of major holdings of the sector including JPMorgan (JPM) and Bank of America (BAC) rose 0.9% and 2.2%, respectively.
Oil Prices Rise
Investors remained alert on the movement of oil prices amid OPEC’s attempt to reduce oil production. Kuwait backed OPEC’S attempt to extend oil production cuts which caused the oil supply to fall. WTI crude prices gained by 1.7% to $50.35 a barrel for the first time in three weeks.
Stocks that made Headlines
Is Verizon Considering Online TV Streaming Service Launch?
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U.S. telecom behemoth AT&T Inc. (T) was recently selected by the First Responder Network Authority (FirstNet) to build and manage the first nationwide broadband network dedicated to America’s police, firefighters and emergency medical services. (Read More)
V.F. Corp Stock Dips Despite Promising 2021 Strategy
The owner of North Face and Timberland brands, V.F. Corp. (VFC) has been grappling with difficult global economic environment and currency headwinds for over a year now. (Read More)
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J P Morgan Chase & Co (JPM): Free Stock Analysis Report
Bank of America Corporation (BAC): Free Stock Analysis Report
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V.F. Corporation (VFC): Free Stock Analysis Report
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