Stocks edge higher, US GDP up 3.5% in third quarter
U.S. stocks performed well on Thursday, following strong reports of third quarter economic growth.
Gross domestic product increased at an annual rate of 3.5 percent in the third quarter, well ahead of expectations.
Earlier this week the Federal Reserve put an end to its bond-buying program, which has raised concerns about when the central bank will start to increase rates.
According to the Fed, the first increase depends on how well the US economy is performing.
Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, told Reuters:
“A strong report, on the heels of a more hawkish tone from the Fed yesterday, has some investors thinking we could see a rate hike faster than might otherwise have been hoped. That’s dampening the spirits of investors who were hoping for easier monetary conditions for an extended period.”
The Fed has said that it is confident in US economic prospects.
Visa and MasterCard Inc Soar
Visa Inc shares soared by 8.8 percent, up to to $233.50, providing the Dow and S&P 500 a significant boost. The company reported earnings that were ahead of expectations, adding that the mobile payment industry would be a “a great driver” for business.
MasterCard Inc was also a strong performer, with shares rising by 7.1 percent up to $81.40. The company announced that revenue was up by almost 13 percent.
According to Thomson Reuters data, so far this season 75.5 percent of S&P 500 companies have exceeded profit expectations.
At 11:48 EDT the Dow Jones Industrial Average was up by 142.28 points (0.84 percent) to 17,116.59. The S&P 500 was up by 4.21 points (0.21 percent) to 1,986.51.