Hooray for low expectations! Stocks are still up slightly by the middle of the trading day after the government reported that the country’s gross domestic product fell less than Wall Street expected during the third quarter. Never mind that this is the weakest economic output since Q3 2001.
Unfortunately, Exxon Mobil’s cautious forecast has cut into this morning’s rally.
AP: Stocks gave up most of an early rally as relief over a better-than-expected reading on the economy in the third quarter gave way to further questions about corporate profits. A cautious forecast from Exxon Mobil Corp. eroded some of the market’s gains.
Still, the market appeared generally relieved after a government report showed the economy contracted in the third quarter by less than expected and after the Federal Reserve’s second interest rate cut in a month. But Exxon said its output in the third quarter declined and the company predicted its capital spending this year will come in at the low end of its forecast.
The Commerce Department reported that the nation’s economic output was the weakest since the third quarter of 2001, but it wasn’t as bad a showing as Wall Street had feared. The department said the gross domestic product, the measure of all goods and services produced within the U.S., fell at a 0.3 per cent annual rate in the July-September quarter, rather than 0.5 per cent as expected.
In midday trading, the Dow Jones industrial average rose 69.54, or 0.77 per cent, to 9,060.50 after rising 276 points in the early going and briefly falling. Exxon, one of the 30 stocks that comprise the Dow, fell $2.86, or 3.8 per cent, to $71.79.
Broader stock indicators also rose. The Standard & Poor’s 500 index advanced 8.47, or 0.91 per cent, to 938.56, and the Nasdaq composite index rose 15.28, or 0.92 per cent, to 1,672.49.
The Russell 2000 index of smaller companies rose 8.38, or 1.69 per cent, to 499.16.
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