Stocks and exchange traded funds (ETFs) received a breath of fresh air today after it was announced that the U.S. economy grew faster than expected in the second quarter.
Economists had called for a 2.7% growth rate, but instead got 3.3%, reports Jeannine Aversa for the Associated Press. It was a nice reversal after two downbeat quarters: the economy shrank in the last quarter of 2007, while it grew a weak 0.9% in the first.
The growth isn’t seen as a permanent sign that the fragile economy has roared back, though. Federal Reserve Chairman Ben Bernanke warned recently that the economy would be weak through the rest of this year.
Fewer people signed up for jobless benefits last week, as well, making for the third consecutive drop after six-year highs were hit earlier this month. Unemployment applications dropped to 425,000, which was 2,000 less than analysts were expecting, reports Christopher S. Rugaber for the Associated Press.
This good news comes on the heels of reports from earlier this week that consumer confidence grew the most in two years.
After the reports were issued, oil retreated some, making plays on energy weak performers. Oil had been rising as Tropical Storm Gustav gained strength and threatened the U.S. energy infrastructure on the Gulf Coast, reports Pablo Gorondi for the Associated Press. Midday, it broke through the $120 barrier.
- U.S. 12 Month Oil Fund (USL), up 30.8% year-to-date
- United States Oil (USO), up 26.3% year-to-date
- United States Gasoline (UGA), up 12.7% since Feb. 28 inception
- PowerShares DB Energy Fund (DBE), up 29.6% year-to-date
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.