Stocks rise in choppy session as GDP shows economy contracted in second quarter

U.S. stocks turned positive in a back-and-forth session on Thursday as Wall Street weighed in on new data that showed economic activity contracted for the second straight quarter in the second quarter.

The S&P 500 rose 0.3% and the Dow Jones Industrial Average rose by roughly the same margin, or 80 points. The tech-heavy Nasdaq Composite rose 0.2%. All three indexes slid early in trading.

Data from the Commerce Department’s release before the opening bell showed GDP fell at an annualized rate of 0.9% last quarter, marking a second straight quarterly decline in economic activity.

Thursday’s moves come after the Federal Reserve on Wednesday afternoon announced an expected interest rate hike of 75 basis points and suggested it may slow the pace of its rate hike cycle. The announcement prompted a rally in the previous trading session which saw the S&P 500 jump 2.6%, the Dow Jones Industrial Average gain 1.4% and the tech-heavy Nasdaq Composite climb 4.1%. %.

Thursday’s GDP report is sure to continue the debate among investors over whether the US economy is in recession, with many market participants judging two consecutive quarters of weaker growth as meeting the unofficial definition. .

However, in recent days, White House officials have been keen to remind the public that recessions are officially called by the NBER, which defines a recession as “a significant decline in economic activity that spreads across economy and lasts more than a few months.”

Treasury Secretary Janet Yellen is expected to speak to reporters about today’s GDP data at 1:30 p.m. ET.

Elsewhere on the economic data calendar, the weekly first jobless claims report showed a slight moderation in first jobless claims, totaling 256,000 last week after 261,000 the previous week.

Still, jobless claims data has trended modestly higher in recent weeks.

On the earnings side, shares of Meta (META) were down more than 7% in early trading after Facebook’s parent company reported second-quarter earnings late on Wednesday that fell below analysts’ estimates. The quarter also marked the social media giant’s first year-over-year decline in revenue.

The company also slashed its spending guidance again and, on a call with analysts, CEO Mark Zuckerberg said, “We appear to have entered an economic downturn which will have a significant impact on the digital advertising industry. It’s always hard to predict how long or how long these cycles will be, but I would say the situation looks worse than a quarter ago.”

Zuckerberg added: “In this environment, we are focused on long-term investments that will position us to be stronger coming out of this downturn – including our work on our discovery engine and Reels, our new advertising infrastructure and the metaverse. We also strive to be rigorous in measuring returns and sizing these investments correctly.”

Earnings from more Big Tech heavyweights are due out on Thursday, with Apple (AAPL) and Amazon (AMZN) on deck to report. Pfizer (PFE), Comcast (CMCSA), Intel (INTC) and Roku (ROKU) are among the other big names in a busy earning list for the day.

The logos of Amazon, Apple, Facebook and Google are seen in a combined photo from Reuters files. REUTERS/File Photos

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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