Stocks close higher after strong economic data
Stocks in the US started off on a positive note, as fears over a military strike in Syria eased. Syria continues to be the headline story, but the pressure for an immediate strike seems to have eased. Better than expected data in the US helped futures gain ground before the opening bell as traders began to focus on market fundamentals.
Prior to the opening bell, the Commerce Department released a strong than expected Growth Domestic Product report. Gross domestic product increased at a 2.5 percent annualized rate, up from an initial estimate of 1.7 percent, according to the Commerce Department. Economists had forecast a 2.2 percent gain. Strong exports and increasing imports released in the trade data at the beginning of the month foreshadowed the stronger than expected gain. Also in US news, Jobless claims in the week ended Aug. 24 dropped 6,000 to 331,000 from a revised 337,000 the week before according to the Labor Department. Analysts’ had forecast a drop to 332,000.
In stock specific telecom news, Verizon Communications (NYSE:VZ) announced that the company is in advanced talks to acquire Vodafone’s 45 percent stake in their Verizon Wireless venture for about $130 billion. Vodafone confirmed the news on Thursday that it was in talks with Verizon to sell its stake, but said there is no certainty an agreement will be reached.
Although US stocks closed higher, they settled off the session highs on weaker than average volume. Momentum on the S&P 500 index is negative with the MACD (moving average convergence divergence) index printing in negative territory with a negative trajectory. The RSI (relative strength index) which is an oscillator that measures overbought and oversold level is printing near 39 which is on the lower end of the neutral range.
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