U.S. Third Quarter GDP Growth Slowed to 2.8%, Private Sector Hiring Picked Up Pace In October

Barry Adams
30 Oct, 2024
New York City

Stock market indexes on Wall Street retained upward bias as investors reviewed the latest batch of positive earnings and economic releases. 

The S&P 500 index gained 0.2% and the tech-heavy Nasdaq Composite gained 0.1% in choppy trading. 

The tech-heavy index jumped to a new intraday record high after Google-parent Alphabet Inc. reported a sharp jump in revenue and earnings in the third quarter. 

On the economic front, the annual pace of GDP growth in the third quarter slowed to 2.8% from 3.0% in the second quarter, the U.S. Bureau of Economic Analysis reported Wednesday. 

The private sector added jobs at the fastest pace in more than a year, according to the October update from ADP. 

Private payrolls expanded to 233,000 in October, faster than the upwardly revised 159,000 in September. 

Businesses added employees at the fastest pace since July 2023, despite the two devastating hurricanes, strikes at ports on the Eastern Seaboard and Boeing, and a round of layoffs at tech companies in the Silicon Valley. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.2% to 5,843.07, the Nasdaq Composite rose 0.2% to 18,748.21, and the Russell 2000 index advanced 0.7% to 2,254.91. 

The yield on 2-year Treasury notes edged lower to 4.14%, 10-year Treasury notes inched lower to 4.25%, and 30-year Treasury bonds inched lower to 4.47%.

WTI crude oil increased $1.05 to $68.27 a barrel, and natural gas prices edged down 5 cents to $2.79 a thermal unit.

Gold fell by $8.80 to $2,783.86 an ounce, and silver decreased by $0.57 to $33.90.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 104.34.

 

U.S. Stock Movers

Advanced Micro Devices dropped 8.9% to $151.43 after the company's quarterly results and guidance fell short of investor expectations. 

Third quarter revenue increased 18% to $6.8 billion from $5.8 billion, net income advanced 158% to $771 million from $299 million, and diluted earnings per share rose to 47 cents from 18 cents a year ago. 

The company estimated a fourth quarter revenue increase of 22% from a year ago to $7.5 billion and a non-GAAP gross margin of 54%. 

Super Micro Computer plunged 31% to $33.95 after the company's auditors, Ernst & Young, resigned, citing material weakness in internal control. 

The company has still not released its financial statements for this year, and the company is reportedly under federal investigation. 

“We are resigning due to information that has recently come to our attention, which has led us to no longer be able to rely on management’s and the Audit Committee’s representations,” Ernst & Young said in their resignation letter. 

Chipotle Mexican Grill declined 7% to $56.24 after the fast food chain operator reported weaker-than-expected same store sales growth and revenue in the third quarter. 

Third quarter revenue increased 13% to $2.8 billion from $2.5 billion, net income advanced to $387.4 million from $313.2 million, and diluted earnings per share rose to 28 cents from 23 cents a year ago. 

Same-store sales growth in the quarter slowed sharply to 6% from 11.2% in the previous quarter. 

During the third quarter, the company repurchased $488.1 million of stock at an average price per share of $54.55, and $1.1 billion remained available at the end of the period. 

Visa Inc. increased 3.3% to $291.02 after the payment processor reported better-than-expected quarterly results. 

Net revenue in the fiscal fourth quarter ending in September increased 12% to $9.6 billion from $8.6 billion, net income advanced 14% to $5.3 billion from $4.7 billion, and diluted earnings per share rose 17% to $2.65 from $2.27 a year earlier. 

In the quarter, payment volume jumped 8%, processed transactions rose 10%, and cross-border volume advanced 13% from a year ago, respectively. 

The company declared a cash dividend of 59 cents per share payable on December 2 to all shareholders on record on November 12. 

During the quarter, the company repurchased 22 million of its Class A common stocks for an average price of $270.85, or $5.8 billion. 

Alphabet Inc. Class A increased 6.3% to $180.40 after the search and cloud computing company reported better-than-expected revenue growth. 

Consolidated revenue in the third quarter increased 15% to $88.3 billion from $76.7 billion, net income advanced to $26.3 billion from $19.7 billion, and diluted earnings per share rose to $2.12 from $1.55 a year ago. 

The company said cloud segment revenue increased 35% to $11.4 billion, led by accelerated growth in its core products and artificial intelligence-driven products and services.