U.S. stock futures added to gains after the annual pace of economic growth in the U.S. was unexpectedly marked up in the fourth quarter to 1%.
Strong gains in oil prices for a second session in a row, along with a global stock rally, also helped boost futures.
S&P 500 futures ESH6, +0.58% rose 12 points, or 0.6%, to 1,962, while Dow Jones Industrial Average futures YMH6, +0.67% gained 118 points, or 0.7%, to 16,790. Nasdaq 100 futures NQH6, +0.70% advanced by 32 points, or 0.7%, to 4,275.
Investors generally interpreted the GDP report as good news. But analysts were more skeptical.
“While the upward revision to headline GDP growth is better than nothing...the bottom line is that fourth-quarter GDP growth was still pretty modest,” said Paul Ashworth, chief U.S. economist at Capital Economics.
Analysts said the lift in GDP was mainly due to an unexpected rise in inventories, which could suggest companies got stuck with more unsold goods than they expected, as well as a big revision down in imports. Consumer spending was revised down and—taking out the influence of inventories—real final sales remained the same.
All of these factors could in fact lead to a reduction in estimates for first-quarter GDP growth, said Peter Boockvar, chief market analyst at The Lindsey Group, in emailed comments
Despite the recent rallies, the main stock indexes remained firmly in the red for the year, with the S&P and Dow down 4.5% and 4.2%, respectively, as of Thursday’s close. The Nasdaq has shed 8.5%.
On Thursday, the S&P SPX, +1.13% closed 1.1% higher, while the Dow DJIA, +1.29% jumped 1.3%, or 212 points, and the Nasdaq Composite COMP, +0.87% tacked on 0.9%. The S&P is 1.8% higher for the week, as of Thursday’s close, while the Dow is up 1.9% and the Nasdaq, 1.7%.
The S&P has “regained its 50-day moving average, which could encourage the bulls,” said Ian Williams, economist and strategist at Peel Hunt, in a note, referring to a closely watched chart level.
But he suggested there isn’t that much oomph in the recent rally. “Trading volumes on the up days have been modest thus far,” Williams said.
Individual movers: Kraft Heinz Co. KHC, +2.70% jumped 5.4%. The food giant posted better-than-expected quarterly profit and revenue late Thursday.
Monster Beverage Corp. MNST, -4.97% lost ground, as the energy drinks maker’s quarterly results disappointed late Thursday.
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J.C. Penney Co. JCP, +15.43% jumped after the department store chain delivered better-than-expected earnings and an upbeat profit forecast late Thursday. Gap Inc.’s GPS, +1.17% quarterly profit topped estimates, but the clothing retailer’s full-year profit guidance was below expectations, helping to send shares lower premarket.
Shares in Foot Locker Inc. FL, -0.06% jumped 15% as the sportswear retailer reported stronger-than-anticipated quarterly profit before the open.
Palo Alto Networks Inc. PANW, +7.63% posted stronger-than-anticipated results Thursday, with the computer security specialist saying its quarterly release hit earlier than planned due to a “manual error.” Shares gained 7.6%.
Other markets: Oil futures CLJ6, +4.17% traded higher early Friday, after gaining nearly 3% Thursday on news major oil producers plan to meet. Commodities-related stocks helped European markets SXXP, +1.58% advance. Asian stocks closed mostly higher, with Chinese shares SHCOMP, +0.95% recovering from the prior day’s tumble. Gold futures GCJ6, -0.86% were slightly lower, while a key dollar index DXY, +0.40% edged up.
Read more: ‘Gold is the new black’ with its best start to the year since 1980
Economic news: At 10 a.m. Eastern, the market will digest data on core inflation, personal income and consumer spending for January, plus consumer sentiment for February. At 1 p.m. Eastern, oil and energy-related stocks could move on a Baker Hughes report on North America’s oil and gas rig count.
Check out: MarketWatch’s Economic Calendar
At the G-20 meeting in Shanghai, China’s top central banker said Beijing won’t drastically weaken the yuan and argued officials there have sufficient tools to support their slowing economy.
On the Federal Reserve front, Fed Gov. Jerome Powell is expected to take part in a panel discussion in New York about Fed communication. That’s scheduled for 10:15 a.m. Eastern. Also in New York, Fed Gov. Lael Brainard is due to give a speech on international monetary policy synchronization at 1:30 p.m. Eastern.
