US benchmark equity indexes experienced an uptick during intraday trading as market participants assessed the latest economic data and corporate earnings reports. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite recorded gains of 0.4% each, closing at 42,515.2, 5,893.5, and 19,456.1, respectively, after midday Thursday.
Among the various sectors, utilities emerged as the top gainers, while the energy sector witnessed the largest declines. In the realm of economic indicators, US real gross domestic product increased at an annual rate of 3.1% in the third quarter, per a final estimate from the Bureau of Economic Analysis.
This figure surpasses a prior estimate from the BEA, which indicated a growth rate of 2.8%—previously considered the consensus according to Bloomberg's compilation. Stifel remarked in a note to clients, "A stronger-than-expected showing in third-quarter GDP reinforces the Federal Reserve's characterization of a 'solid' economy and the necessity for a reduced pace and number of further rate cuts.
With a robust consumer base and positive business investment, there is ample justification for a policy pause sooner rather than later as we shift towards 2025." Additionally, US existing home sales exceeded expectations last month, marking the largest year-over-year increase since June 2021, based on data released by the National Association of Realtors.
"Home sales momentum is building," stated NAR Chief Economist Lawrence Yun. "More buyers have entered the market as the economy continues to create jobs, housing inventory increases compared to the previous year, and consumers acclimate to a new normal of mortgage rates between 6% and 7%." In a further development, weekly applications for unemployment insurance in the US declined more than anticipated, according to government data.
The US 10-year yield rose by 8.4 basis points to reach 4.58% during intraday trading, while the two-year rate fell by 4.1 basis points to 4.31%. On Wednesday, the Federal Open Market Committee of the US central bank reduced interest rates by 25 basis points and indicated that fewer cuts are projected in the future than previously estimated.
Fed Chair Jerome Powell commented at a press conference after the FOMC meeting, "The monetary policy stance is now significantly less restrictive. We can therefore be more cautious as we consider further adjustments to our policy rate." In the commodity markets, West Texas Intermediate crude oil prices dipped by 0.8%, trading at $70.02 per barrel during Thursday's session.
In corporate news, Darden Restaurants ($DRI) saw its shares soar by 15%, making it the top gainer on the S&P 500, after the parent company of Olive Garden and LongHorn Steakhouse raised its full-year revenue outlook and reported fiscal second-quarter results that exceeded expectations. Accenture ($ACN) followed as the second-best performer on the S&P 500, with a 6.9% increase, as the consulting firm enhanced its full-year revenue growth outlook after announcing better-than-expected fiscal first-quarter results.
Conversely, Lamb Weston ($LW) revealed disappointing fiscal second-quarter performance, leading to a reduction in its full-year guidance, and announced the resignation of its chief executive. Shares of the frozen potato products supplier plummeted by approximately 21%, marking it as the worst performer on the S&P 500.
Micron Technology ($MU) experienced the steepest decline on the Nasdaq and the second-largest drop on the S&P 500, falling by 17%. The memory and storage product manufacturer indicated potential weakness in its consumer-oriented markets that may influence its second-quarter forecast. In upcoming reports, Nike ($NKE), FedEx ($FDX), and BlackBerry ($BB.US) are slated to announce their results after the market closes on Thursday.
In the precious metals sector, gold prices declined by 1.7%, settling at $2,609.50 per troy ounce, while silver recorded a 4.3% slump to $29.42 per ounce..