December 7, 2022

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Dow closes nearly 200 points higher on better-than-expected GDP report, Nasdaq drops as Meta stocks drop

Dow closes nearly 200 points higher on better-than-expected GDP report, Nasdaq drops as Meta stocks drop

The Dow Jones Industrial Average closed higher on Thursday after new data showed that third-quarter gross domestic product grew faster than expected and hinted at easing inflation, encouraging investors to buy stocks linked to the health of the economy.

The Dow rose 194.17 points, or 0.6%, to end at 32,033.28 for its fifth day of winning. Caterpillar, McDonald’s and Honeywell led the 30-share index higher after companies reported better-than-expected earnings. The Dow Jones index traded up 549 points on the day.

The S&P 500 closed 0.6% lower, ending the session at 3,807.30. The Nasdaq Composite lost 1.6% to close at 10792.68, as a defeat in Meta and other technology stocks weighed on the index.

US economy It grew at an average rate of 2.6% year on year The Bureau of Economic Analysis report showed for the period, against Dow Jones estimates of 2.3% growth. The Series-Weighted Price Index, a measure of the cost of living adjusted to reflect changing consumer behavior, rose 4.1% for the quarter, well below the 5.3% estimate. Headline inflation rose 4.2%, down sharply from 7.3%, according to a measure used by the Federal Reserve.

That gave hope to market watchers looking for data pointing to lower inflation, which could prompt the Federal Reserve to ease rate hikes after the November meeting, said Cliff Hodge, chief investment officer at Cornerstone Wealth. Bond yields also fell after the data was released.

“This morning’s GDP release was a buffer number for risky assets,” said Hodge, referring specifically to the price index data. “This is another sign that the worst inflation may be behind us.”

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The tech sector continues to continue its recent problems, dragging the broader stock market down. Meta shares fell 24.6% on A Double the fourth-quarter forecast And disappointing third-quarter earnings Wednesday. The company also said it will lose more money next year by building the metaverse. The report led to several analysts downgrading the stock.

Lea la cobertura del mercado de hoy en español aquí.

Correction: The Dow rose as much as 549 points. Previous version misspelled the number.