- U.S. economy grew at slowest pace in more than a year in Q3
- Caterpillar, Merck rise after posting higher profits
- Indexes up: Dow 0.47%, S&P 0.60%, Nasdaq 0.71%
Oct 28 (Reuters) – Wall Street’s main indexes rose on Thursday as upbeat quarterly earnings from Caterpillar, Merck and Ford helped investors shrug off data that showed U.S. economic growth slowed sharply in the third quarter.
Caterpillar Inc (CAT.N) added 2.9% after reporting a quarterly profit on high commodity prices, while a quarterly beat and a forecast raise by drugmaker Merck & Co Inc (MRK.N) helped its shares gain 4.0%. read more
The Commerce Department’s report showed the U.S. economy grew at a 2% annualized rate last quarter, as COVID-19 infections flared up, upending global supply chains and fueling labor and goods shortages. read more
Labor market conditions in the United States continued to improve, with the number of Americans filing new claims for unemployment benefits dropping to a fresh 19-month low last week.
“Slower growth in Q3 was the result of a normalization of spending activity and the significant bottlenecks that remained. There are signs of a better development in the fourth quarter,” Bernd Weidensteiner, senior economist at Commerzbank said in a note.
“(The data) will not dissuade the Fed from deciding on a gradual end to its bond purchases next week, given the good situation on the labor market and increasing price risks.”
Stellar earnings reports have driven the benchmark S&P 500 (.SPX) index and the Dow Jones Industrial Average (.DJI) to record highs this week, while bringing the tech-heavy Nasdaq (.IXIC) to just 0.4% below its all-time peak hit on Sept. 7.
Profits for S&P 500 companies are expected to grow 37.6% year-on-year in the third quarter, up from an expected 29.4% rise at the start of the earnings season, according to data from Refinitiv.
Focus will also be on earnings reports from Apple Inc (AAPL.O) and e-commerce giant Amazon.com (AMZN.O) after market close on Thursday, wrapping up a largely upbeat reporting season for mega-cap technology stocks.
Shares of Apple rose 2.1% to provide the biggest boost to the S&P 500 and the Nasdaq, followed by gains in Tesla Inc (TSLA.O).
At 10:06 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 165.72 points, or 0.47%, at 35,656.41, the S&P 500 (.SPX) was up 27.49 points, or 0.60%, at 4,579.17, and the Nasdaq Composite (.IXIC) was up 108.00 points, or 0.71%, at 15,343.83.
In the run-up to the Federal Reserve’s policy meeting next week, market focus has also moved beyond pricing the likely taper of asset purchases this year and onto the timing of an interest rate hike next year.
Also on the radar, U.S. President Joe Biden will urge Democrats in Congress to back a new $1.75 trillion framework for economic and climate change spending. read more
Advancing issues outnumbered decliners by a 2.26-to-1 ratio on the NYSE and by a 2.40-to-1 ratio on the Nasdaq.
The S&P index recorded 22 new 52-week highs and two new lows, while the Nasdaq recorded 54 new highs and 60 new lows.
Reporting by Devik Jain and Shashank Nayar in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel
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