The stock markets in the United States gained today driven by stronger than expected economic growth in the second quarter. The Dow Jones Industrial Average (DJIA) climbed 2.27%, the S&P gained 2.43%, NASDAQ increased 2.45%, and the Russell 2000 went up 1.45%.
The Department of Commerce reported that the U.S. gross domestic product (GDP) expanded at a seasonally adjusted annual rate of 3.7% in the second quarter of 2015. The GDP growth rate was higher than the 2.3% initial estimate.
A separate report from the Department of Labor showed that the number of people who filed for unemployment benefits declined by 6,000 to 271,000 for the week ended August 22.
In an interview with Bloomberg, John Canally, chief economic strategist at LPL Financial commented, “We got our pullback, and now we’re going to focus on U.S. things like GDP and the Fed. When you’re in a correction, it’s not fun, but when you’re out, you can refocus on what matters.”
Canally added, “The economy is in good shape, and we’re chugging along at a good pace and that’s good for earnings. It also should clear some of the noise out of this market. There has been a lot of concern about a slowdown in the economy.”
The market turmoil, which was ignited by investors’ concern regarding the global economic growth reduced expectations that the Federal Reserve would raise interest rates next month. New York Federal Bank President William Dudley recently stated that the market rout made the case for a September interest rate hike “less compelling.”
- Dow Jones Industrial Average (DJIA) – 16,655.23 (+2.27%)
- S&P 500- 1,987.70 (+2.43%)
- NASDAQ- 4,812.71 (+2.45%)
- Russell 2000- 1,148.59 (+1.45%)
- EURO STOXX 50 Price EUR- 3,280.78 (+3.47%)
- FTSE 100 Index- 6,192.03 (+3.56%)
- Deutsche Borse AG German Stock Index DAX- 1,315.62 (+3.18%)
- Nikkei 225- 18,574.44 (+1.08%)
- Hong Kong Hang Seng Index- 21,838.54 (+3.60%)
- Shanghai Shenzhen CSI 300 Index- 3,205.64 (+5.95%)
Stocks in Focus
The stock price of Freeport-McMoRan surged more than 28% to $10.19 per share. The world’s largest copper mining company reduced its spending and eliminated jobs in response to the deteriorating market conditions. The company reduced its capital expenditure budget to $4 billion and planned to cut its workforce by 10%.
The stock value of Fitbit declined more than 8% to $34.97 per share. The company was primarily impacted by investors’ concern regarding China’s economy. Investors are also worried that Fitbit is losing a huge chunk of its market share in mainland China. Fitbit lost more than 20% in stock value over the past month.
Signet Jewelers gained more than 14% to $138.82 per share after the company reported strong earnings for the second quarter. The company reported that its adjusted earnings increased 20% to $1.28 per share, higher than the $1.15 per share expected by analysts. Its revenue climbed 15% to $1.42 billion compared with the $1.38 billion consensus estimate.