Stocks Skyrocket on GDP and Jobs Data

Investors got the reassurance they wanted Thursday after the Commerce Department reported the first economic uptick in a year. Stocks came close to rebounding from recent losses as the gross domestic product rose 3.5% for the third quarter.

The Dow Jones Industrial Average was up 199 points at 9961, its best one-day gain since July. The Nasdaq rose 38 points to 2098 and the S&P 500 ticked up 23 at 1066.

The excitement over the GDP data more than offset the impact of a smaller-than-expected drop in weekly jobless claims reported by the Labor Department.

Gross domestic product rose by a higher-than-expected seasonally adjusted 3.5% annual rate July through September, the Commerce Department said Thursday in its first estimate of third-quarter GDP. Economists surveyed by Dow Jones Newswires had forecast 3.2% GDP growth during the summer.

The cheer over the better-than-expected GDP for the third quarter puts U.S. stocks in the direction of opening higher. The Dow has posted three triple-digit losses in four sessions as investors have begun shying away from riskier assets.

The rise in GDP was the first since the second quarter of 2008. It served as an unofficial confirmation that the longest and deepest recession since the Great Depression has ended. The purveyor of the official word on recessions, the National Bureau of Economic Research, declared the slump began in December 2007. The private, non-profit research group has yet to announce an ending date.

The GDP gain was driven by consumer spending, which rose by 3.4% in the third quarter, compared with a 0.9% drop in the April-to-June period. Consumer spending contributed 2.36 percentage points to GDP growth.

Meanwhile, initial claims for jobless benefits declined by 1,000 to 530,000 in the week ended Oct. 24. The previous week's level was unrevised at 531,000. Economists surveyed by Dow Jones Newswires had expected a larger decrease of 6,000 claims.

The four-week moving average of new claims, which aims to smooth volatility in the data, fell by 6,000 to 526,250 from the previous week's unrevised figure of 532,250. That is the lowest level since Jan. 10.

Oil futures rebounded on the Nymex after a Wednesday slide. As of 4:03 p.m., front month futures contracts were up $2.50 at $79.96 a barrel.

Dow Jones Newswires contributed to this report.