You are here

US: Stocks rally for second day after US growth report


[NEW YORK] Wall Street stocks rose on Tuesday for the second straight session after US data showed third-quarter US economic growth in line with expectations at two percent.

The Dow Jones Industrial Average climbed 165.65 points (0.96 per cent) to 17,417.27.

The broad-based S&P 500 rose 17.82 (0.88 per cent) to 2,038.97, while the tech-rich Nasdaq Composite Index advanced 32.19 (0.65 per cent) to 5,001.11.

The Commerce Department trimmed its estimate of growth in the July to September period to 2.0 per cent from 2.1 per cent, in part because of lower business investment in inventories.

Market voices on:

But analysts said the report showed solid growth in personal consumption spending which drives about two-thirds of the activity in the US economy.

Michael James, managing director of equity trading at Wedbush Securities, said the gains this week were a response to deep losses in stocks late last week.

"Sometimes, this happens when sentiment goes too far in one direction," James said. "The market remains extremely resilient, and it's just too difficult right now to take the market down with any conviction."

Shares in automaker Ford rose 3.4 per cent following reports it is in talks with Google to collaborate on autonomous car technology. Google parent Alphabet rose 0.3 per cent.

Chipotle Mexican Grill tumbled 5.3 per cent on news that the Centers for Disease Control and Prevention is investigating an outbreak of E. coli that may be unrelated to a previous one in November that led to 53 cases in nine states.

Dow member Caterpillar rose 4.9 per cent despite news that a US jury had found the heavy-machinery maker guilty of stealing trade secrets from a British supplier. 24/7 Wall Street said the "rather limited" size of the award likely lifted shares.