GDP Growth, More Easing, and Tough Cuts: Afternoon Buzzers
Stock futures are posting gains in the afternoon on Thursday following an up day for the markets on Wednesday and positive news on the fiscal cliff discussion in Washington.
S&P: +0.56%, Nasdaq: +0.65%, Dow: +0.56% at 8:30 AM.
Jobless Claims Mixed: Initial jobless claims dropped 5.5 percent for the week ended November 24 compared to the previous week, according to the U.S. Department of Labor. However, the four-week moving average grew 1.9 percent. The current unemployment rate in the U.S. is 7.9 percent.
Third-Quarter GDP Revised Up! The U.S. Department of Commerce released a third-quarter report indicating that real GDP increased at an annual rate of 2.7 percent quarter over quarter, a surprise beat over the previous estimate of 2.0 percent growth. GDP grew just 1.3 percent in the second quarter.
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A Swing and a Miss: Shares of jewelry manufacturer and retailer Tiffany & Co. (NYSE:TIF) were off as much as 6.67 percent in the afternoon after third-quarter results miss the mark. Revenue grew 4 percent year over year but net income dropped 30 percent. Shares of Kohl’s Corp. (NYSE:KSS) are also off as much as 10.06 percent in the afternoon after posting a 4.9-percent drop in November sales.
More Quantitative Easing? The Federal Reserve seems to like the idea of “giving it gas ’till it goes.” On top of QE3, where the Fed announced it would buy $40 billion in mortgage-backed securities per month until economic conditions improved, the Wall Street Journal is reporting that the central bank may continue buying long-term Treasury securities with short-term securities even after Operation Twist expires.
Steep Cuts in a Tough Market: “The short-term macroeconomic outlook remains volatile, with major uncertainties around future US and European economic growth,” comments Rio Tinto plc (NYSE:RIO), the world’s second-largest producer of iron ore, in a media release. The company announced it is targeting spending cuts over $7 billion as it heads to an investor seminar in Sydney on Thursday. Cautious optimism mixed with the proposed cost savings helped push shares as much as 4.37 percent higher today afternoon.