4:21pm: A September downturn shouldn't come as a shock, analyst says
The Dow closed Thursday 116 points, 0.4%, at 33,666, the Nasdaq Composite added 108 points 0.8%, to 13,201 and the S&P 500 improved 25 points, 0.6%, to 4,230. The small-cap Russell 2000 index climbed 15 points, 0.9%, to 1,794.
Despite the gain, the S&P 500 is still on pace for its worst month of 2023 with only a couple of sessions to go.
“You’re just getting a little bit of reprieve from the selling pressure,' said Ross Mayfield, investment strategy analyst at Baird. "Absent a big catalyst, it’s usually hard to sustain such movement in one direction. This little bit of a pause, maybe a slight downtime shouldn’t be unexpected, even amidst the kind of more negative backdrop.”
12:00pm: Robust economic data gives Wall Street a lift
Stocks shook off a sudbued start to push higher as a robust economic growth reading encouraged hopes of a economic soft landing.
At midday, the Dow Jones Industrial Average was up 186.10 points, 0.6%, at 33,736.37, the S&P 500 was up 35.19 points, 0.8%, at 4,309.70 and the Nasdaq Composite was up 141.19 points, 1.1%, at 13,234.04.
Figures showed the US economy maintained a fairly strong pace of growth in the second quarter, at an annualised rate of 2.1% in the second quarter, unchanged from the second estimate. Elsewhere, figures showed the labour market remained resilient as well.
However, there may be challenges ahead.
"We expect a weakening labor market and mounting headwinds to disposable incomes will drive a sharper slowdown in consumption and the broader economy over the rest of the year," said Michael Pearce, lead US economist at Oxford Economics.
Pearce added that a sharp slowdown into year-end will keep policymakers on the sidelines, rather than following through with an additional rate hike as planned.
9:40am: Wall Street muted after mixed growth figures
Wall Street made a mixed start to proceedings as in-line economic growth figures showed a sharp drop in personal consumption - the main driver of the US economy.
Shortly after the opening bell the Dow Jones Industrial Average was up 45.92 points, 0.1%, at 33,596.19, the S&P 500 was flat at 4,275.00 and the Nasdaq Composite was down 42.95 points, 0.3%, at 13,049.90.
US gross domestic product grew at the pace expected in the second-quarter of the 2023, though it eased from an upwardly revised expansion in the first quarter, numbers from the Bureau of Economic Analysis showed.
Quarter-on-quarter GDP gross grew 2.1% on an annualised basis in the three months to June 30, unchanged from the second estimate, while the first-quarter expansion was upwardly revised to 2.2% from 2.0% previously.
But Ian Shepherdson chief economist at Pantheon Macroeconomics pointed out the make-up of second quarter growth was "substantially different" from the second estimate.
Consumption growth was cut to 0.8% from 1.7%, while business investment in structures was revised up to 16.1% from 11.2%, and the GDP contributions from net trade and inventories were revised up by 0.26pp and 0.09pp respectively.
"As consumption is nearly 70% of GDP, expect to see Q3/4 growth forecasts revised down," Shepherdson said.
Separate data from the US Department of Labor, meanwhile, showed initial jobless claims edged up to 204,000 from 202,000 a week earlier, but were below expectations of a rise to 215,000.
Stocks on the move include Peloton, up 6.0%, after its 5-year global partnership deal with lululemon, down 0.1%, and Workday, down 8.7%, after lowering subscription revenue guidance.
Micron Technology is another weak feature, down 4.9%, after its results disappointed.
7:00am: Futures little changed ahead of GDP reading
US stocks are indicated to open little changed as investors await a GDP reading and watch the oil price creep ever closer to the $100 mark.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.1% higher, while those for the S&P 500 rose 0.1%, and contracts for the Nasdaq 100 futures were down 0.1%.
Economic figures will provide an early focus with the release of the final estimate for second-quarter economic growth, with economists expecting gross domestic product to hold steady at its second reading of a 2.1% annualised increase.
Initial claims for US state unemployment benefits, a proxy for lay-offs, are expected to have risen to 215,000 last week from 201,000 the prior week.
WTI oil prices briefly topped $95/barrel before settling down below $94/barrel but are still 16% higher for the month sparking inflationary concerns.
In company news, Peloton shares are 13% higher in pre-market trading after it signed a five-year global partnership with sportswear retailer, lululemon Athletica, after the close Wednesday.
The pact will see Peloton, the New York-based exercise outfit, become the exclusive digital fitness content provider for lululemon, and lululemon become the primary athletic apparel partner to Peloton.
But Micron Technology Inc looks set for a weak start, with shares sagging 4.8%, ahead of the market open after results disappointed.
The chipmaker posted an adjusted loss of $1.07 per share on revenue of $4.01 billion, compared to earnings of $1.45 per share on revenue of $6.44 billion in the year-ago quarter.
Analysts had projected a loss of $1.11 per share on revenue of $3.69 billion.
Elsewhere, Nike is due to release financial first quarter earnings.