The S&P 500 index rose 0.7% as of 1:30p.m. Eastern time. The Dow Jones Industrial Average rose 239 points, or 0.7%, to 35,167 and the Nasdaq rose 0.4%. The gains were broad, with about 86% of the stocks in the benchmark S&P 500 rising. Technology companies made some of the biggest gains, along with a wide range of retailers and other consumer-oriented companies.
Online brokerage Robinhood made an underwhelming debut on the Nasdaq, falling below its offering price of $38, or the low end of its expected range. The stock was trading at $37.66, down 0.9%, within its first hour of trading. The company has drawn millions of new investors to Wall Street with commission-free trades, but has also attracted controversy. It and other online brokerages rattled Wall Street earlier this year when investors used the platforms to drive up prices to seemingly unreasonable levels for “meme” stocks like GameStop.
Facebook fell 4.1% and weighed down the communications sector after it warned of slower growth through the rest of the year.
The yield on the 10-year Treasury note remained relatively stable. It edged higher to 1.27% from 1.26% late Wednesday. A government report helped ease some concerns on Wall Street about the pace of the economic recovery. The Commerce Department said the U.S. economy grew at a solid 6.5% annual rate last quarter. The total size of the economy has now surpassed its pre-pandemic level. It also revised its figures for 2020, showing that the economy contracted by a slightly smaller amount than previously reported.
The latest GDP figure fell short of economists forecasts for 8.5% growth, but investors have largely brushed off the wide miss. “That’s still an eyepopping number,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors, on the latest GDP figure. Analysts have been expecting the economic recovery to slow from its breakneck pace earlier this year, but to remain steady as businesses reopen and people return to many of the things they were doing before the pandemic.
“Eventually the growth rates will slow, but it’s important to understand that just because the rate is slowing doesn’t mean we’re entering into a contraction,” Horneman said. Investors also got encouraging news on the broader employment picture, which has tended to lag the rest of the recovery. Claims for unemployment benefits dropped by 24,000 to 400,000 last week, the Labor Department reported. The upbeat economic data follows the Federal Reserve’s statement on Wednesday signaling that it will keep its support for the economy intact.
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