Stocks Rebound On Encouraging GDP, PCE Readings

(RTTNews) - U.S. stocks are up firmly in positive territory Thursday afternoon, rebounding fairly well after suffering sharp losses in the previous session due to a sell-off in mega-cap stocks following disappointing quarterly earnings.

The major averages are all up in positive territory. The Dow is up 335.50 points or 0.84 percent at 40,189.37. The S&P 500 is up 21.48 points or 0.4 percent at 5,448.61, while the Nasdaq is gaining 56.20 points or 0.32 percent at 17,398.62.

Data showing a sharper than expected acceleration in U.S. economic growth in the second quarter is contributing a bit to the positive undertone on Wall Street.

Tesla, which declined sharply in the previous session on weak earnings, is gaining about 4.2 percent.

Exxon Mobil, Johnson & Johnson, Home Depot, Chevron Corporation, Salesforce, Inc., Pepsico, Accenture, Cisco Systems, Texas Instruments, GE Aerospace, Blackstone, Pfizer and Caterpillar, Comcast Corporation, Nike, Uber Technologies and Boeing Company are gaining 1 to 4 percent.

IBM is gaining nearly 6 percent. The company's bottom line totaled $1.83 billion, or $1.96 per share in the second quarter, compared with $1.58 billion, or $1.72 per share, in last year's second quarter.

Accenture, Morgan Stanley, Goldman Sachs, Citigroup, Apple, Amazon, Nvidia Corporation,Visa, Berkshire Hathway, Wells Fargo and ADP are also notably higher.

Microsoft Corporation, Alphabet, Meta Platforms, Eli Lilly & Co. and Advanced Micro Devices are among the prominent losers.

A report released by the Commerce Department showed real gross domestic product in the U.S. surged by 2.8% in the second quarter after jumping by 1.4% in the first quarter. Economists had expected GDP to increase by 2%.

The Commerce Department said the GDP growth primarily reflected increases in consumer spending, private inventory investment, and nonresidential fixed investment.

Compared to the first quarter, the acceleration in real GDP in the second quarter primarily reflected an upturn in private inventory investment and an acceleration in consumer spending, the Commerce Department said.

On the inflation front, the report said the personal consumption expenditures price index increased 2.6% in the second quarter compared with an increase of 3.4% in the first quarter.

Excluding food and energy prices, the PCE price index increased 2.9% in the second quarter compared with an increase of 3.7% in the first quarter.

A separate data from the Commerce Department said durable goods orders plunged by 6.6% in June after inching up 0.1% in May. Economists had expected durable goods orders to rise by 0.3%.

A report from the Labor Department showed initial jobless claims fell to 235,000 in the week ended July 20th, a decrease of 10,000 from the previous week's revised level of 245,000. Economists had expected jobless claims to dip to 238,000 from the 243,000 originally reported for the previous week.