Fin24

US stocks gain on revised GDP growth

2012-11-30 07:46

New York - US stocks closed higher on Thursday, helped by an expected strong upward revision in the US economic growth estimate for the third quarter.

The Dow Jones Industrial Average finished up 38.71 points at 13,021.82.

The S&P 500 gained 6.02 at 1,415.95, while the Nasdaq Composite added 20.25 at 3,012.03.

The Commerce Department raised its estimate for third-quarter growth as expected, to 2.7% from 2.0%, but the details on consumer spending in the period pointed to a slower fourth quarter.

"The prevailing message is that the economy is growing, but at a rate that is below potential and which is making it difficult to put a major dent in the unemployment rate," said Patrick O'Hare of Briefing.com.

Online coupons broker Groupon was up 2.7% after a board meeting produced no fireworks, amid reports of fractures between the company's founders and management.

There had been speculation that, as the company's share price has sagged, that chief executive Andrew Mason's head was on the block.

"The board and management team are focused on the performance of the company and they are all working together with heads down to achieve Groupon's objectives," spokesperson Paul Taaffe said.

Poor data from retailers echoed the read on consumer spending in the GDP numbers.

Shares of department store Kohl's sank 12.0% after it reported a 5.6% fall in same-store sales in November. Analysts had expected a rise.

Kohl's competitor Macy's lost 4.3% on its lower November sales, though it blamed the impact of Hurricane Sandy, which shut down much of the New York area economy in the first week of the month.

Jeweler Tiffany & Co lost 7.5% as it missed quarterly earnings expectations - net earnings fell 30% - and cut its forecast for the rest of the year.

Barnes & Noble plunged 11.2% as it reported disappointing sales of its Nook e-reader in its quarterly earnings, though overall the company beat expectations on the bottom line.

Volatile BlackBerry maker Research In Motion added 4.0% helped by an upgrade from Goldman Sachs; earlier the share was up more than 10%.

Bond prices were mixed. The 10-year US Treasury yield was flat at 1.62%, while the 30-year moved to 2.80% from 2.78% on Wednesday.

Bond prices and yields move inversely.