Forexpros – U.S. stocks surged higher at the open Friday, as the GDP indicated that the economy expanded at a faster pace than expected in the second quarter, while hopes for progress in tackling the debt crisis in the euro zone continued to support market sentiment.
Near the open of U.S. trade, the Dow climbed 0.47%, the S&P 500 added 0.55% and the tech heavy Nasdaq advanced 0.48%.
A surprise jump in GDP lifted equities when the U.S. Bureau of Economic Analysis reported gross domestic product rose to a seasonally adjusted annual rate of 1.5% in the second quarter, from 2% in previous quarter whose figure was revised up from 1.9%.
Analysts had expected U.S. GDP to rise 1.5% in the second quarter.
The report also indicated U.S. consumer spending rose 1.5%, less than expectations for a 1.6% increase and following a 2.2% rise in the first quarter.
Further lifting stocks, U.S. UoM consumer sentiment rose unexpectedly last month, data showed on Friday.
In a report, the University of Michigan said that consumer sentiment rose to a seasonally adjusted 72.3, from 72.0 in the preceding month.
Analysts had expected UoM consumer sentiment to remain unchanged at 72.0 last month.
Meanwhile, sentiment remained supported after European Central Bank President Mario Draghi said on Thursday that the bank will do whatever is necessary to preserve the euro.
In a speech in London, Draghi appeared to indicate that the ECB would be prepared to intervene to lower Spanish and Italian bond yields, saying that government borrowing costs would fall within the central bank’s mandate if they interfered with the ‘transmission’ of monetary policy.
Facebook was expected to be in focus after the social media giant reported a drastic slowdown in revenue growth and failed to offer financial forecasts that quelled fears about its ability to boost advertising growth, sending shares down 14.10% in pre-market trade.
Also on the downside, Starbucks cut its outlook for the current quarter, citing global economic weakness and a recent slowdown in visits in the U.S., its biggest market for sales and profits, sending shares tumbling 9.82% in early trading.
The news came after the release of weak results by other chain restaurants in recent weeks, including Chipotle and McDonald’s.
Elsewhere in earnings, Merck & Co saw shares jump 1.89% in pre-market trade, after the pharmaceutical company reported better-than-expected quarterly results, thanks to strong sales of its vaccines and treatments for diabetes and HIV.
In the tech sector, Apple, whose latest earnings report strongly disappointed earlier in the week, saw shares edge down 0.07% in early trade after the company agreed to acquire AuthenTec Inc. for approximately USD350 million, gaining fingerprint-authentication technology.
The deal was expected to help the iPhone maker shore up its biometric features, which help maintain security on devices.
Across the Atlantic, European stock markets traded sharply higher. The EURO STOXX 50 climbed 1.52%, France’s CAC 40 jumped 1.57%, Germany’s DAX rose 1.01%, while Britain’s FTSE 100 added 0.33%.
Later in the session, the U.S. was to release a report by the University of Michigan on consumer sentiment
Forexpros – U.S. stocks surged higher at the open Friday, as the GDP indicated that the economy expanded at a faster pace than expected in the second quarter, while hopes for progress in tackling the debt crisis in the euro zone continued to support market sentiment.
Near the open of U.S. trade, the Dow climbed 0.47%, the S&P 500 added 0.55% and the tech heavy Nasdaq advanced 0.48%.
A surprise jump in GDP lifted equities when the U.S. Bureau of Economic Analysis reported gross domestic product rose to a seasonally adjusted annual rate of 1.5% in the second quarter, from 2% in previous quarter whose figure was revised up from 1.9%.
Analysts had expected U.S. GDP to rise 1.5% in the second quarter.
The report also indicated U.S. consumer spending rose 1.5%, less than expectations for a 1.6% increase and following a 2.2% rise in the first quarter.
Meanwhile, sentiment remained supported after European Central Bank President Mario Draghi said on Thursday that the bank will do whatever is necessary to preserve the euro.
In a speech in London, Draghi appeared to indicate that the ECB would be prepared to intervene to lower Spanish and Italian bond yields, saying that government borrowing costs would fall within the central bank’s mandate if they interfered with the ‘transmission’ of monetary policy.
Facebook was expected to be in focus after the social media giant reported a drastic slowdown in revenue growth and failed to offer financial forecasts that quelled fears about its ability to boost advertising growth, sending shares down 14.10% in pre-market trade.
Also on the downside, Starbucks cut its outlook for the current quarter, citing global economic weakness and a recent slowdown in visits in the U.S., its biggest market for sales and profits, sending shares tumbling 9.82% in early trading.
The news came after the release of weak results by other chain restaurants in recent weeks, including Chipotle and McDonald’s.
Elsewhere in earnings, Merck & Co saw shares jump 1.89% in pre-market trade, after the pharmaceutical company reported better-than-expected quarterly results, thanks to strong sales of its vaccines and treatments for diabetes and HIV.
In the tech sector, Apple, whose latest earnings report strongly disappointed earlier in the week, saw shares edge down 0.07% in early trade after the company agreed to acquire AuthenTec Inc. for approximately USD350 million, gaining fingerprint-authentication technology.
The deal was expected to help the iPhone maker shore up its biometric features, which help maintain security on devices.
Across the Atlantic, European stock markets traded sharply higher. The EURO STOXX 50 climbed 1.52%, France’s CAC 40 jumped 1.57%, Germany’s DAX rose 1.01%, while Britain’s FTSE 100 added 0.33%.
Later in the session, the U.S. was to release a report by the University of Michigan on consumer sentiment.
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