Investors were stuffed with economic reports last week, and they happily
gobbled up tech shares; however, some could say the odds were in stocks'
favor. According to Ned Davis Research, the market has been up on Thanksgiving
week two-thirds of the time since 1952. A stronger dollar also played a role
in share movement. Early on in the week, the Nasdaq rallied nearly 3%, ahead
of an anticipated jump in the preliminary GDP report for the third quarter.
That report did not disappoint, showing the fastest economic growth in almost
20 years. Still, investors held off feasting on tech issues in conjunction
with the news. "Overall, the numbers look quite positive, but stocks have
already priced in a growth rate that's already passed," said Edgar Peters,
chief investment officer at PanAgora Asset Management, to Reuters News.
"People are worried the next quarter's GDP numbers aren't going to be as
strong." Some promising news for tech stocks were also buried within the
figure. "The surprise element in this report is the upward revision to capital
spending on equipment and software, which is now believed to have rocketed
18.4%, compared to the advance 15.4% estimate," said Ian Shepherdson, Chief
U.S. Economist for High Frequency Economics, to Dow Jones Newswires. Investors
are hoping the strong GDP figure will inevitably translate into accelerated
job growth, a factor that has been noticeably absent within the broader
economic recovery. Amongst other upbeat reports, personal income increased,
durable goods orders rose, the Chicago PMI strengthened and consumer
confidence surged. Still, like the turkey boost, stocks may not be able to
evade statistics, even in the face of robust economic data. Bear Stearns
investment strategist Francois Trahan said to CBS.MarketWatch, "The market
typically loses some momentum in December before approaching the strongest
month: January."
High-Tech Monday Update is provided courtesy of Thomson Financial. This
information is believed to be true and accurate; we take no responsibility for
inaccurate information and reserve the right to update our reports. For more
information, please visit our web site at http://www.thomson.com/financial.
SOURCE Thomson Financial
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