STOCK markets were little changed despite data showing the US economy grew at a faster pace than expected.
Investor sentiment got a boost after the Commerce Department said US gross domestic product expanded at a 2 per cent annual rate, following 1.3 per cent growth in the second quarter.
However, the positive data may not be enough to stem a recent slide in the market, which has seen the S&P drop 3.7 per cent from near five-year highs on 14 September.
“We ought to be growing at four per cent, not two per cent,” said Phil Orlando, chief equity market strategist, at Federated Investors, in New York.
The S&P 500 has dropped 1.8 per cent this week as dismal corporate earnings and cautious outlooks, especially from large multinationals, painted a pessimistic picture of the global economy.
Adding to uncertainty was the impending US presidential election on 6 November, which, along with earnings and growth worries, helped drop the benchmark S&P index to below a key support level, the 50-day moving average, at around 1,434.
Many analysts expect the retreat to wane near 1,400 or 1,375, as the Federal Reserve’s latest stimulus policy puts a floor under equity prices.
With 244 companies in the S&P 500 having reported through to Thursday, 62.3 per cent have beaten earnings expectations, a little better than the typical 62 per cent average.
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