The stock market today opened slightly higher as GDP unexpectedly grew at 2% in the third quarter, overshadowing another miss from tech behemoth Apple Inc. (Nasdaq: AAPL).
Here's a breakdown of the latest news, along with one stock that's soaring today.
- 3Q GDP beats as "consumption" increases- The initial estimate for third-quarter U.S. gross domestic product (GDP) surprisingly came in at 2%, ahead of expectations for a 1.8% increase. At first glance this is a positive sign for an economy that only grew 1.25% in the previous three months – but the details of the report point otherwise. Over one-third of the 2% increase, 0.71%, came from government consumption, of which 0.64% came from defense spending. While personal consumption contributed 1.42% to GDP growth, it only grew 2% from the previous quarter, below expectations of 2.1%. "You're getting a mix of data that don't have a clear direction," Stephen Wood, the New York-based chief market strategist for North America for Russell Investments, which oversees $152 billion, told Bloomberg News. "It's important for investors' psychology to see GDP data beating estimates. Yet the earnings season has been a very challenging one." It appears that the increase in government spending, which was the biggest rise in three years, was led by defense maintenance costs. This is the last GDP estimate before the election and U.S. President Barack Obama will surely try to promote this as overall economic growth, even though it is far from it.