Russell 2000 stays strong midday
The Russell 2000 (NYSE: IWM) and the other major U.S. indices are in the green midway though the session on news of unexpectedly strong GDP growth. At 1:08 p.m. ET, the small-cap index had advanced 7.43 points, or 0.91%, to 823.58. The Dow Jones Industrial Average (INDU) had increased 68.12 points, or 0.49%, to 13,860.59.
The bulls are having a party with half the session left to go, as investors react to news of unexpectedly upbeat third-quarter economic numbers and await the U.S. Federal Reserve’s decision on interest rates.
Gross domestic product rose at a seasonally adjusted annual rate of 3.9% during the third quarter, the U.S. Commerce Department reported before the opening. That’s better than the forecasted increase of 3.2% and a sign that the economy is dealing well with the ongoing slump in the housing sector.
Breaking down the numbers shows that exports, consumer spending and business investment posted increases.
In other economic news, a report from business outsourcing solutions provider Automatic Data Processing, Inc. (NYSE: ADP) estimated that private employers added 106,000 jobs in October. That’s above the average for the previous three months and a sign that the labor market remains tight.
Meanwhile, the Mortgage Bankers Association reported that mortgage applications increased 3.8% for the week ended Oct. 26. while 30-year mortgage rates fell to their lowest level since May.
Investors are eagerly awaiting the Fed’s decision on the target interest rate, which will be announced shortly after 2 p.m. ET. On Tuesday the futures markets were expecting a rate cut of 0.25%, but today’s solid economic data increase the likelihood that the target interest rate will stay put at 4.75%.
Elsewhere, the price of oil has jumped $3.26 to $93.64 a barrel on news that the Energy Information Administration reported a drop in weekly crude oil inventories.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Pericom Semiconductor Corp. (PSEM), up 34% on news of a strong fiscal first quarter.
• Answerthink Inc. (ANSR), up 30% on news of a rise in third-quarter earnings.
• First Consulting Group Inc. (FCGI), up 27% on news it’s being purchased by Computer Sciences Corp. (CSC).
Biggest percentage losers:
• GPC Biotech AG (GPCB), down 59% on news a cancer drug failed.
• FARO Technologies Inc. (FARO) down 24% on news of a third-quarter loss.
• Buffalo Wild Wings Inc. (BWLD), down 20% on news that third-quarter earnings missed Wall Street’s expectations.
