Stocks rise on strong US economic growth


By KEN SWEET

Associated Press

An unexpectedly strong report on U.S. economic growth pushed stocks higher Friday, capping off Wall Street’s best week in three months.

The report, which showed the U.S. economy grew at a healthy 4.1 percent annual pace between July and September, is the latest positive piece of economic data investors have gotten in recent weeks.

“It’s a fantastic signal that we’re getting robust growth and it looks like it might be accelerating,” said Jack Ablin, chief investment officer for BMO Private Bank in Chicago, which oversees $66 billion.

On Friday, the Dow Jones Industrial average rose 42.06 points, or 0.3 percent, to 16,221.14. The index ended the week up 3 percent, its biggest gain since the week of Sept. 13.

The Standard & Poor’s 500 index rose 8.71 points, or 0.5 percent, to 1,818.31 and the Nasdaq composite added 46.61 points, or 1.2 percent, to 4,104.74. Both indexes ended the week up roughly 2.5 percent.

In a sign that investors have a strong appetite for risk, the Russell 2000 index, an index made up mostly of smaller, high-growth companies, closed up nearly 2 percent Friday to 1,146.47.

The bulk of this week’s gains came Wednesday, after the Federal Reserve announced it was going to pull back on its economic stimulus program. The Fed said it would reduce its bond-buying program to $75 billion a month from $85 billion a month.

Investors cheered the surprise decision, sending the Dow up nearly 300 points Wednesday.

“They had to get out of the way,” said Quincy Krosby, market strategist with Prudential Financial. “The more the market obsessed about when the Fed was going to pull back, the more the market couldn’t focus on anything else, like the improving economy.”

Friday’s gross domestic product estimate was the latest report to show unexpected strength in the U.S. economy. The 4.1 percent annualized growth rate is the fastest since 2011. More importantly, most of the increase came from consumer spending, a key part of the U.S. economy.

In other markets, the yield on the benchmark U.S. 10-year Treasury note fell to 2.89 percent, from 2.93 percent the day before. Gold rose $10.10, or 0.8 percent, to $1,203.70 an ounce.


Reader Comments ...


Next Up in Business

Chipotle food scare highlights issue that impacts thousands annually
Chipotle food scare highlights issue that impacts thousands annually

Chipotle is grappling with more cases of foodborne illness, an issue that causes one in six Americans to get sick annually after consuming contaminated foods or beverages. The company’s stock has taken a hit this week following foodborne illness issues at a restaurant in Virginia and a report of rodents scurrying around at one of their restaurants...
Chipotle food issues: Does your local restaurant have violations?
Chipotle food issues: Does your local restaurant have violations?

Chipotle’s stock has taken a hit this week following foodborne illness issues at a restaurant in Virginia and a report of rodents scurrying around one of their restaurants in Texas. Chipotle executives told Business Insider that the chain temporarily closed a restaurant in Sterling, Va., after a small number of customers reported symptoms like...
Air Force awards big contract to UDRI
Air Force awards big contract to UDRI

The University of Dayton Research Institute has received a seven-year, $43 million Air Force contract to develop nonmetal materials for airplanes, spacecraft and ground vehicles. Researchers at UDRI’s campus and at the Air Force Research Laboratory at Wright-Patterson Air Force Base will investigate adhesives, sealants, elastomers, textiles,...
Bacon cravings push pork prices higher
Bacon cravings push pork prices higher

Your love of bacon is causing pork-belly prices to reach record highs. As more and more people reach for a pack of bacon at the grocery store, pig farmers are struggling to keep up the demand, according to a report from the Wall Street Journal. Pork-belly, the part of the hog used to make bacon, have risen around 80 percent in 2017. Americans bought...
Ohio unemployment rate ticks up
Ohio unemployment rate ticks up

Ohio’s unemployment rate rose slightly in June, back up to 5 percent from 4.9 percent in May. The number of unemployed in the state has gradually risen by about 10,000 people in the past year, even as the state added 56,800 jobs from June 2016 to June 2017. Non-agricultural wage and salary employment increased 11,500 over the month, to 5,528...
More Stories