U.S. Stocks Rebounded, Real Third Quarter GDP Growth Revised Lower

Barry Adams
21 Dec, 2023
New York City

Stocks attempted a rebound after benchmark indexes fell sharply in the previous session.

The S&P 500 index and the Nasdaq Composite fell 1.5% in Wednesday's trading as investors reacted negatively to FedEx's business outlook.

Moreover, investors also booked profit ahead of the year's end after the S&P 500 index gained more than 23% and the Nasdaq Composite advanced more than 42% in the year so far.

Investors reviewed the release of the third quarter GDP growth report and the weekly jobless claim update.

 

Weekly Jobless Claims Hold Steady

Initial jobless claims increased by 2,000 to 205,000 in the week ending on December 16, the U.S. Bureau of Labor Statistics reported Thursday.

Moreover, continuing claims decreased by 1,000 to 1.865 million in the previous week ending on December 9.

Initial claims are near a two-month low of 203,000, indicating tight labor market conditions, and the four-week moving average decreased by 1,500 to 212,000.

 

Third Quarter GDP Growth Revised Lower to 4.9%

Real gross domestic product increased at an annual rate of 4.9% in the third quarter, according to the third estimate from the Bureau of Economic Analysis.

The economic growth estimate was downwardly revised from 5.2%, but ahead of the 2.1% increase in the second quarter.

The U.S. economy expanded at the fastest pace since the fourth quarter of 2021, and the latest revision was driven by the downward revision to consumer spending and imports.

Consumer spending rose at a slower pace of 3.1% from the previous estimate of 3.6%, and the increase in imports was revised lower to 4.2% from 5.2% estimated in the second quarter.

However, residential investment growth was revised higher to 6.7% from 6.2%, and government spending increase was revised higher to 5.8% from 5.5%.

 

U.S. Indexes and Yields

The S&P 500 index gained 0.1% to 4,740.31, and the Nasdaq Composite increased 0.4% to 14,950.07.

The yield on 2-year Treasury notes increased to 4.35%, 10-year Treasury notes inched lower to 3.86%, and 30-year Treasury bonds eased to 4.0%.

Crude oil decreased $1.34 to $72.86 a barrel, and natural gas prices increased 4 cents to $2.49 a thermal unit.

Gold advanced $7.36 to $2,036.47 an ounce and extended this year's gains to 13.5%.

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.06 and extended the previous week's loss of 1.4% and the loss of 0.9% in the year so far.

 

U.S. Stock Movers

Micron Technology advanced 7.4% to $84.47 after the advanced semiconductor chipmaker reported better-than-estimated revenue and a smaller-than-expected loss in its latest quarter.

The company's forward-looking quarterly revenue outlook was also ahead of some investors' estimates.

CarMax jumped 8.5% to $80.98 after the used car retailer reported better-than-expected quarterly results.

Boeing Company increased 1.7% to $264.70 after receiving approval from a Chinese aviation regulator to resume 737 Max deliveries to Chinese airlines.

Boeing still needs approval from China's National Development and Reform Commission, according to the trade publication Air Current.

Warner Bros. Discovery increased 0.1% to $11.70, Paramount Global decreased 1.4% to $15.28, and two companies were engaged in preliminary merger talks, according to a report by CNBC.