US stocks rise after upbeat GDP report

Wall Street had a mixed session today as investors applauded a surprisingly strong third-quarter gross domestic product report but nonetheless worried that the increase could not be sustained.

Analysts said the GDP report did not have more of a market impact because it reflected past economic performance, and investors were not certain future growth would be as robust.

Disappointing earnings from Exxon Mobil also weighed on shares.

The Dow Jones industrial average closed up 12.08, or 0.1%, at 9,786.61, following a three-day gain of 192 points. Earlier in the day, the blue-chip average advanced as much as 64 points and lost as much as 20 points.

But the broader market declined modestly. The Nasdaq composite index lost 3.87, or 0.2%, to 1,932.69. The Standard & Poor’s 500 index fell 1.17, or 0.1%, to 1,046.94.

The Commerce Department reported that the US GDP grew at a 7.2% annual rate in the third quarter. It was the strongest pace since the first quarter of 1984 and beat analysts’ estimates for a 6% growth rate.

Meanwhile, the Labour Department reported that new jobless claims last week declined by 5,000 to 386,000, signalling a slowdown in layoffs.

“Certainly the GDP number was good and the market celebrated that,” said Barry Berman, head trader for Robert W Baird & Co in Milwaukee. “But no one expects this number to continue at this rate, and they do expect the numbers” to be eventually revised lower.”

Stocks have climbed since mid-March on investor expectations of a strong economic rebound.

While gains have been more modest in recent weeks, analysts say investors are still looking for reasons to buy despite some concerns that stock prices might be too high.

Martha Stewart Living Omnimedia rose 41 cents to 10.40 after the multimedia company reported a quarterly loss that was narrower than analysts’ predictions.

Akamai Technologies jumped 2.04, or 34.2%, to 8 after the provider of Internet speedup services posted a quarterly loss which was smaller than analysts’ predictions.

Losers included Exxon Mobil, which fell 1.51 to 36.30, after the oil company reported third-quarter earnings which missed analysts’ estimates.

Aetna declined 2.49 to 56.30 after the insurance giant posted quarterly profits that came in higher than Wall Street’s projections.

Advancing issues outnumbered decliners 7 to 6 on the New York Stock Exchange. Volume was moderate.

The Russell 2000 index, a barometer of smaller company stocks, fell 1.44, or 0.3%, to 530.37.