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October 24, 2014

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US stocks move higher, helped by Facebook, GDP

Image

Ben Margot / AP

This Tuesday, July 16, 2013, file photo, shows a sign at Facebook’s headquarters in Menlo Park, Calif.

NEW YORK — Stocks moved higher in morning trading Thursday, helped by strong earnings from Facebook and an encouraging report that the U.S. economy grew at an annual rate of 3.2 percent in the fourth quarter.

KEEPING SCORE: The Dow Jones industrial average jumped 138 points, or 0.9 percent, to 15,876 as of 12:15 p.m. Eastern. The Standard & Poor's 500 index rose 21 points, or 1.2 percent, to 1,786 and the Nasdaq composite jumped 78 points, or 2 percent, to 4,110.

INVESTORS 'LIKE' FACEBOOK: Facebook jumped $8.57, or 16 percent, to $62.10. The social media company reported results late Wednesday that exceeded the expectations of financial analysts. Facebook's adjusted profit was 31 cents per share, four cents better than forecast.

MOTOROLA DEAL: Google rose $28.84, or 3 percent, to $1,135.76 after the company announced it was selling Motorola's smartphone business to Lenovo for $2.9 billion. Google bought Motorola Mobility for $12.4 billion in 2012, and it has never been profitable for the search giant.

ECONOMIC GROWTH: The U.S. economy grew at a 3.2 percent annual rate in the final three months of 2013, a positive sign for the economy in 2014. Consumer spending, a major driver of the U.S. economy, picked up in the quarter.

'GOING LOWER:' Even with Thursday's gains, it's been a difficult month for investors. The Dow is down 4 percent in January, the worst start to a year since 2009. Emerging markets worries have driven most of the sell-off. A survey last week confirmed that manufacturing in China, the world's second-biggest economy, slowed in January.

"The emerging markets caught a lot of people off guard," said Ian Winer, director of trading at Wedbush Securities. "But at this point, I'm pretty focused on corporate earnings and that's about it. And earnings have been OK, but not all that great. I think we're going lower, and I think (the sell-off this month) is just the beginning."

BONDS: The yield on the 10-year Treasury note rose to 2.71 percent from 2.68 percent late Wednesday. Bond yields fell to a two-and-a-half month low Wednesday following the Federal Reserve's announcement that it would pull back further on its economic stimulus program.

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