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JIM VETTER
Oct 27, 2022 3:57PM ET
Stagflation coming!
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Dow Jumps After Q3 GDP Data Beats Expectations
Published Oct 27, 2022 09:49AM ET
Updated Oct 27, 2022 11:05AM ET
© Reuters.
By Liz Moyer
Investing.com -- The Dow jumped after data that showed the economy expanded in the third quarter after two quarters of shrinking output.
At 11:02 ET (15:02 GMT), the Dow Jones Industrial Average rose 401 points or 1.3%, while the S&P 500 was up 0.1% and the NASDAQ Composite was down 0.7%.
The Commerce Department’s first reading of gross domestic product for the most recent quarter showed a gain of 2.6%. Meanwhile, the core PCE price index was aligned with expectations and slowed from the second quarter.
GDP compares to a drop of 0.6% in the second quarter and a drop of 1.6% in the first quarter, and it beat expectations for a gain of 2.4% in the third quarter. Traditionally, two quarters in a row of contraction signals a recession, but the Biden administration had consistently argued that the economy wasn’t in a recession, especially given the strong labor market.
Exports of industrial supplies and materials, travel and financial services rose and consumer spending increased. Investing in housing fell.
New jobless claims of 217,000 last week also came in lighter than expected. On Friday, investors will see data on a key inflation gauge watched by the Federal Reserve.
Meta Platforms (NASDAQ:META) stock fell 23% after reporting a drop in revenue and profit as expenses soared. The parent of Facebook is paring back its workforce amid a drop in digital advertising.
McDonald’s Corporation (NYSE:MCD) stock rose 3.7% after the fast-food chain beat expectations for the quarter and said traffic is growing even though it raised menu prices.
Oil rose. Crude Oil WTI Futures was up 1.8% to $89.42 a barrel, and Brent Oil Futures rose 1.2% to $94.94 a barrel. Gold Futures fell 0.1% to $1667.
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Comments (12)
Brad Albright
Oct 27, 2022 3:57PM ET
A growing economy is not stagnant.
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Mario Rossi
Oct 27, 2022 12:44PM ET
If gdp is good, fed can pump rate much higher. I suggest 9% by end 2023!!!
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Stephen Fa
Oct 27, 2022 12:05PM ET
Error: Core PCE is tomorrow, not today. Today's GDP price index was favorable but not nearly as important a metric to Fed as PCE.
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First Last
Oct 27, 2022 12:05PM ET
PCE Prices (Q3) released this morning
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First Last
Oct 27, 2022 12:05PM ET
Core PCE Price Index (MoM & YoY) tmrrw
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Laurent Chavey
Oct 27, 2022 11:02AM ET
2% 2 weeks before the elections..hum hum
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perplexed76 .
Oct 27, 2022 11:00AM ET
but this is bad for market gamblers, isn't it?
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志彬 吳
Oct 27, 2022 10:56AM ET
Enter the market to pick up cheap, the more you pick up the cheaper
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Casador Del Oso
Oct 27, 2022 10:48AM ET
Economy can handle much higher interest rates and mortgage rates. Stocks still overvalued.
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First Last
Oct 27, 2022 10:48AM ET
"can" doesn't mean "should"
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Steven ML
Oct 27, 2022 10:42AM ET
Tomorrow's headline: GDP adjusted downwards because of "error" in calculations
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志彬 吳
Oct 27, 2022 10:30AM ET
cpi continues to rise
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Dave Jones
Oct 27, 2022 10:23AM ET
Dow jumps as dow surges due to rising dow.
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