Dow Closes Up More Than 200 Points, At Intraday High
8/28/2008 4:27 PM ET
(RTTNews) -
Following a better than expected preliminary reading on economic growth, stocks ended Thursday's session with a standout performance. Nonetheless, the markets saw a light trading day that exacerbated the move.
U.S. economic growth in the second quarter far exceeded the previous estimate, according to a report released by the Department of Commerce, with the better than expected growth primarily due to an upward revision to exports.
The report showed that gross domestic product increased at an annual rate of 3.3 percent in the second quarter compared to the advance estimate of 1.9 percent growth. Economists had been expecting GDP growth for the quarter to be revised up to 2.7 percent.
In a note to clients, Joel Naroff, Chief Economist at Naroff Economic Advisors, noted that the data showed that "the economy actually expanded quite solidly in the spring." Looking ahead, Naroff stated, "We could post a little slower, but not disastrous rate during the second half."
Separately, the Labor Department released its report on initial jobless claims in the week ended August 23rd on Thursday, showing that jobless claims fell in line with economist estimates compared to an upwardly revised reading for the previous week.
Stocks saw additional buying interest as crude prices turned lower after earlier topping $120 a barrel as traders showed they felt a recent rally may have been overdone. Light sweet crude for October delivery moved to $117.05 a barrel, down $1.11 on the session. Oil hit as high as $120.50 amid concerns Tropical Storm Gustav could cause problems in the Gulf of Mexico's oil region.
In other news, Fannie Mae (FNM) revealed major changes to its top management after the closing bell on Wednesday. The mortgage backer appointed David Hisey as Chief Financial Officer, Peter Niculescu as Chief Business Officer and Michael Shaw as Chief Risk Officer.
Fannie Mae said the senior executive appointments, which are effective immediately, were aimed at overseeing and implementing its recently announced capital management and credit loss reduction plan.
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