U.S. Growth Revised Higher on Inventories, Jobless Claims Fall

Nichole Harper
05 Dec, 2013
New York City

U.S. stocks searched for a direction and the dollar declined after the European Central Bank held its key lending rate. U.S. economic growth in the third quarter was revised higher to 3.6%. Weekly jobless claims fell 23,000 to 298,000.

[R]1:10 PM New York – U.S. stocks searched for a direction and the dollar declined after the European Central Bank held its key lending rate. U.S. economic growth in the third quarter was revised higher to 3.6%. Weekly jobless claims fell 23,000 to 298,000.[/R]

Stocks on Wall Street searched for a direction after weekly jobless claims declined last week and the U.S. economic growth estimate in the third quarter was revised higher.

S&P 500 index declined 0.2% to 1,789.19 and the Nasdaq Composite Index added 1.70 to 4,039.70.

In London trading, FTSE 100 index slid 0.1% or 7.61 to 6,502 and in Frankfurt the DAX index fell 0.1% or 12.97 to 9,128.

In Paris, CAC 40 index slipped 0.5% or 18.72 to 4,130.

The dollar declined against the euro after the European Central Bank left its key lending rate unchanged at 0.25%.

ECB President Mario Draghi in an accompanying note said the inflation in the currency union is expected to stay well below the target set by the central bank for the next two years and the ECB is “ready to act if necessary” to support the economic growth.

The euro traded at $1.3663, one month high since the end of October.

Weekly Jobless Claims Fall

Weekly jobless claims in the last week declined 23,000 to 298,000, nearly a six-year low. Late Thanksgiving may have played a role in the decline in claims and claims have been consistently near pre-recession level for last several months.

U.S. Q3 Growth Rate Revised Higher

The U.S. economic growth rate in the third quarter was revised higher to 3.6% annual rate, strong than expected, largely on higher inventories.

Adjusted for inventories, the growth rate would have been at 1.9%.

Economists are estimating a significant slowdown in the growth in the fourth quarter and the rate is expected to impacted by the government shutdown in October.

U.S. Stocks in Review

Apple Inc ((AAPL)) increased 1.1% after two China based carriers received approvals to operate on the fourth generation wireless network. Chinese carries are expected to launch Apple iPhone for the faster network access.

Broadcom Corp ((BRCM)) added 3% on the speculation the company is poised to ship its wireless chips for Samsung Electronics Co smartphones.

Dollar General Corp ((DG)) gained 5% after the deep discount retailer revised its full-year outlook. The retailer reported third-quarter profit of 72 cents a share.

Electronic Arts Inc ((ERTS)) declined 8% after Pacific Crest analyst Evan Wilson suggested that the new version of the “Battlefield” game may be delayed.

General Growth Properties ((GGP)) increased 4% and the company is set to replace Molex Inc from Dec 10 in the S&P 500 index, according to the index publisher.

Puma Biotechnology Inc ((PBYI)) surged 52% after the company said its experimental breast-cancer drug is set to move to the third and final stage of clinical trial.