By William Watts and Thornton McEnery
U.S. stock indexes closed higher Thursday after good third quarter earnings reports and signs Democrats in Congress may be close to a budget deal provided support to investors who looked past a disappointing reading on the health of the overall economy in the third quarter.
How did stock-index futures trad e?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -2.53% closed up 239.79 points or 0.68% to 35730.48, narrowly missing a record close.
The S&P 500 /zigman2/quotes/210599714/realtime SPX -2.27% popped 44.74 points or 0.98% to 4596.42, a record close.
The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -2.23% advanced 212.28 points or 1.39% to 15,448.12 , its own first record since Sept. 7.
On Wednesday, the Dow and S&P 500 pulled back modestly from record finishes set a day earlier, while the Nasdaq ended virtually unchanged.
What drove the market?
Investors have been emboldened by strong results from leading American corporations, with Ford /zigman2/quotes/208911460/composite F -2.47% shares up 8% after the auto maker reported mixed third-quarter results but raised guidance for this year, resumed its dividend and said computer chip shortages are easing.
Worries that the economy is still hobbled in the wake of the pandemic and could continue to face higher prices and supply chain disruptions have been a lingering concern for market participants.
The U.S. economy grew at an annualized rate of 2% in third-quarter, according to an initial reading of gross domestic product, the official scorecard of the American economy. The reading, the slowest growth rate since the 2020 recession, was far weaker than expectations of 2.8%, and was down from 6.7% in the second quarter.
“GDP told us what we already knew, the economy slowed down considerably in the third quarter. The good news is we see the next few quarters more than making up for the slowdown, as COVID trends continue to improve,” said Ryan Detrick, chief market strategist at LPL Financial, in emailed remarks.
Pending home sales fell 2.3% in September compared with August, the National Association of Realtors reported Thursday. Economists polled by MarketWatch had projected a 1% increase.
Meanwhile, weekly new jobless claims fell to 281,000 in the week ending Oct. 23, marking the lowest since March of last year, from a revised 291,000 in the week prior.
The data offers a muddled picture of the economic recovery from COVID-19, with the Federal Reserve set to meet next week to update its policy plans.
Investors are also watching the actions of other central banks after the Bank of Canada decision to abruptly end its bond purchasing program and said it was on a path toward interest rate increases, as the U.S.’s northern neighbor aims to combat inflation fears.
Meanwhile, the European Central Bank on Thursday, as expected, left its monetary policy measures unchanged , saying it would continue to purchase assets via its pandemic emergency purchase program at a slower pace than seen in the second and third quarters. ECB President Christine Lagarde pushed back against rising market expectations for rate increases by the end of next year, but failed to reverse bets on such a move.