The U.S. economy grew at its fastest rate in 19 years in the third quarter, led by, of all things, business investment.
The 7.2% jump in GDP was led by an 11% increase in business investment and a 15% surge in equipment and software. Computer sales alone added half a percentage point to the GDP number.
The numbers were a welcome change from the last three years, when consumer spending was the only thing propping up the economy.
But the stock market’s response to the numbers was muted, in part because of the belief that the third quarter’s growth rate is not sustainable.
The Nasdaq slipped 3 to 1932, the S&P 500 lost 1 to 1046, and the Dow added 12 to 9786. Volume rose to 1.62 billion shares on the NYSE, and 2.17 billion on the Nasdaq. Advancers led by a few issues on the NYSE, while decliners led 16-14 on the Nasdaq. Upside volume was 50% on the NYSE, and 55% on the Nasdaq. New highs-new lows were 451-12 on the NYSE, and 448-7 on the Nasdaq.
After the close, Brightpoint , Wireless Facilities
and S1
beat estimates, while Sonic
met estimates.
During the day, Akamai soared 34% on its results.
McData fell 14% on a pricing dispute with EMC
that analysts said could hurt McData’s quarter.
BMC surged 9% on its results, while United Online
fell 10% on its results.
Photon Dynamics , InfoSpace
, NetScreen
, Akamai
, ESS Tech
, F5
, Overstock
and Cray
all rose on their results.
EDS slipped on its earnings, and Ericsson
and Newport
finished down too.
Sun rose 6% on a wireless partnership with TI
.
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