Stocks Rise Modestly on Economic Upside
NEW YORK ( TheStreet) -- U.S. stocks showed modest gains Thursday on stronger-than-expected U.S. economic growth combined with a drop in jobless claims while fears of an imminent U.S. military intervention against Syria appeared to be easing.
The market's guarded advance suggests that investors continue to view the economic recovery as muted, and that signs of strength may soon prompt the Federal Reserve to begin to curb its bond-buying stimulus measures, possibly as early as next month. The central bank's support has fueled equity markets for close to two years.
"I don't think yet we have reversed enough of those ... technical and sentiment factors to suggest we're out of the woods here," said Liz Ann Sonders, chief investment strategist at Charles Schwab. "There's some thoughts that we could have a bounce here; it looks like the market tried to do it today, it failed a little bit."
The benchmark 10-year Treasury was plunging 14/32, boosting the yield to 2.819% amid the Fed taper concerns.
"With the U.S. economy growing in line with the Federal Reserve's forecasts from June, there is reason to believe that the Fed will move ahead with its plan to reduce the pace of QE3 next month," Christopher Vecchio, a New York-based DailyFX analyst said in a report.
The second estimate for U.S. second-quarter gross domestic product showed a gain of 2.5%, up from the advance estimate of a 1.7% rise and better than the 2.2% growth expected by economists, the Bureau of Economic Analysis reported.
On the labor market front, initial jobless claims for the week ended Aug. 24 fell by 6,000 to 331,000, according to the Labor Department. Economists on average were expecting claims of 332,000. Meantime continuing claims for the week of Aug. 17 decreased by 14,000 to 2.989 million versus the average economist estimate of 2.98 million.
"The jobs numbers, at least on the surface, have suggested a higher pace of GDP growth than what we've been getting -- there's been this disconnect," said Sonders. "I think the
Heavyweight telecomm stock Verizon Communications
Vodafone confirmed Thursday that it's in talks with Verizon to sell its 45% stake in their joint venture, Verizon Wireless .
The Wall Street Journal reported Wednesday that the two companies had rekindled discussions in a deal that likely would cost Verizon well more than $100 billion. Vodafone said Thursday there is no certainty an agreement will be reached.