Markets Rally On Strong GDP Data

New York, NY (AHN) - All three major indices opened higher Thursday and continued that way as better than expected second quarter preliminary Gross Domestic Product (GDP) data helped lift markets.

The Commerce Department reported a 3.3 percent growth in GDP for the second quarter, above the 2.7 percent growth economists had been expecting. Nearly half of the growth was attributed to a strong export rate during the quarter as foreign countries bought up U.S. goods. Exports grew by 13.2 percent, more than double the 5.1 percent seen in the first quarter of the year.

The Dow Jones Industrial average rose 212 points or 1.85 percent. Some 29 of 30 Dow components closed Thursday with a gain. Coca-Cola was the only laggard as shares slumped 1.25 percent after the company saw its stock rating cut to neutral from outperform by Credit Suisse. Bank of America was the strongest component, adding 6 percent on Thursday.

The S&P 500 added 19 points or 1.48 percent as nine of 10 major economic sectors finished the session with a gain. The financial sector was the main beneficiary from Thursday's market rise, adding 4.5 percent. The energy sector was the lone laggard, down 0.8 percent as the sagging price of crude oil weighed on the sector.

Oil fell $2.56 a barrel to settle at $115.59 on the New York Mercantile Exchange. With the uncertainty of Hurricane Gustav looming, many oil companies have removed workers from oil and gas platforms in the Gulf of Mexico.

The Nasdaq Composite rose 29 points or 1.2 percent as tech was strong across the board. Semiconductor stocks rose 1.1 percent.

In other economic news, initial unemployment claims for the week ending Aug. 23 fell 10,000 to 425,000, generally in-line with economists' expectations.

Friday's session will see the release of the August Chicago Purchasing Managers Index (PMI) along with a revised Michigan Sentiment reading for August.