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- Stocks on Thursday climb despite a weaker economic growth data
- Futures in the Nasdaq heavily pressured, projected opening suggests a slide of 1.3%
US Stocks Climb
Major indexes on Wall Street rose on Thursday despite the latest growth rate report of the US economy showing the expansion appears to stall. Indeed, the new data released Thursday showed the US economy grew by 6.5% on an annualized basis in the quarter that ended June. While the economic growth exceeded its pre-pandemic size, the GDP number arrived below the expected rate of 8.5%.
Stocks, nevertheless, pushed higher on renewed confidence that the lower growth rate would convince the Federal Reserve to keep its monetary policy unchanged for the foreseeable future.
Moreover, new filings for unemployment benefits remained near a pandemic low. The latest jobless claims report showed the number of people looking for unemployment benefits dropped slightly to 400,000, continuing its downward trajectory.
While both the GDP report and the newest jobless claims missed Wall Street expectations, market participants increased their risk appetite for stocks as they piled into economically sensitive shares. The hunt for bargains pushed the Dow Jones to a new intra-session record.
The blue-chip 30-stock index advanced 153.60 points on the day, or 0.44%, to 35,084.53. The S&P500 added 18.51 points, or 0.42%, to 4,419.15. The Nasdaq Composite lagged behind but still eked out a gain of 15.68 points, or 0.11%, to close the session at 14,778.26.
Investors are largely expecting the continued stimulus injection from the Federal Reserve would further extend the positive outlook for stocks. However, Fed Chair Jerome Powell suggested on Wednesday that the US central bank may soon start discussions on timing the tapering of asset purchases. The Fed has been buying bonds worth $120bn on a monthly basis in order to support financial markets since the pandemic began more than a year ago.
Steep Drop in Futures
In corporate news, Amazon released a weaker-than-expected earnings report. The company’s sales figures missed expectations by about $2bn. Amazon’s revenue for the second quarter arrived at $113.1bn, slightly lower than the forecasted $115.4bn. Profits, however, came in better than the consensus. Amazon said its net income was $7.8bn, or $15.12 a share, beating estimates of $12.28 a share.
Shares of Amazon slumped nearly 7.5% in overnight trading as investors were largely used to seeing the company blow past sales expectations. Dragging the sentiment, the e-commerce giant said it expected a decrease in both revenue and net income for the next quarter.
Stock futures on Friday indicate a steep drop in the tech-centered Nasdaq Composite index. A pre-market sell-off appears to be defining futures trading on the last session for the month of July. Prior to the opening, the Nasdaq Composite is higher by about 1.90% for the month. The S&P500’s monthly performance currently stands at 2.83%, while Dow Jones is higher by roughly 1.70% month-to-date.
In cryptocurrencies on Friday, major digital assets are trading flat as the market cools off after an 8-day winning streak for the orange coin. Bitcoin’s price snapped eight straight days of gains on Thursday and is currently trading moderately to the upside on the day, at $39,800 per token. Ether, the second-largest crypto-token, is outperforming its bigger peer. Ether is higher by about 4.5% on the day, gravitating above $2,400 per coin.
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