Stocks rallied today as the Commerce Department revised its second-quarter gross domestic product data to show a faster 3.3% pace of expansion, which quelled fears of a downturn.
The Dow Jones industrial average closed up 212.67, or 1.85%, at 11,715.18; the S&P 500 rose 19.01, or 1.48%, closing at 1,300.67; and the Nasdaq composite was up 29.18, or 1.22%, to close at 2,411.64. All numbers are preliminary.
A surge in U.S. exports, helped by a weaker dollar, contributed to the upward revision of the GDP, which earlier was reported as a 1.9% increase. Also, first-time claims for unemployment benefits fell 10,000 in the latest reporting week ended Aug. 23.
Fannie Mae and Freddie Mac posted double-digit percentage gains after analyst Bruce Harting at Lehman Brothers Holdings said the mortgage lenders may be sufficiently capitalized. Neither company currently has a capital shortfall, and both continue to do new business, Mr. Harting wrote today in a note to clients.
The Financial Select Sector ETF also rallied, and Lehman Brothers shares jumped as well amid market talk that the fourth-largest Wall Street firm may create a separate unit for all or part of its $40 billion commercial real estate mortgage portfolio and seek outside investors for the venture.
Light sweet crude oil closed down $2.56 a barrel at $115.59 on the New York Mercantile Exchange as the International Energy Agency said it would make supplies available if needed because of Tropical Storm Gustav, which could be heading for the Gulf Coast.