The S&P 500 advanced to close in on a fresh record high. The Dow and Nasdaq also moved higher.
Investors on Thursday have been digesting some key economic prints including the first estimate of third-quarter U.S. gross domestic product (GDP) and weekly unemployment claims. The GDP report showed the economy decelerated to expand at the slowest rate in over one year for the July through September quarter, with the Delta variant and supply-side constraints capping economic activity. GDP rose at a 2.0% annualized rate, missing estimates for the 2.6% pace consensus economists anticipated.
But even given this weakness, and some of the other tepid economic data seen as of late, equity investors have remained resilient and pushed stocks to record levels.
“The market is right to look through some of the third-quarter weakness. A lot of what we’ve seen lately in terms of softness in the data is not really a destruction or disappearance of demand, it’s simply a matter of supply chains that are forcing demand into the future,” Simona Mocuta, State Street Global Advisors chief economist, told Yahoo Finance Live. “There is still a lot of strength ahead of us. There is a lot of money waiting on the sidelines in consumer savings and checking accounts that I think bodes well for 2022.”
A major factor fueling stocks higher has been the bevy of strong corporate earnings results reported to date.
Some of the biggest equity index components and largest companies in the U.S. posted much better-than-expected sales and revenue growth compared to last year, reflecting strong demand trends across various pockets of the economy despite shortages. Shares of mega-cap technology companies Alphabet (GOOGL) and Microsoft (MSFT) each set record highs on Wednesday after these companies posted their earnings results Tuesday. Investors are set to receive more earnings reports from companies including Apple (AAPL) and Amazon (AMZN) later on Thursday.