Stocks head for strong open

September 29, 2011: 9:08 AM ET
premarkets

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NEW YORK (CNNMoney) -- Stocks were headed for a strong open Thursday after the latest reading on U.S. economic growth came in much stronger than expected.

Investors were further heartened by the latest jobless claims report, which showed unemployment claims at their lowest level since April.

U.S. stocks were already poised for a positive start after Germany's parliament approved new powers for the eurozone's bailout fund. Europe's debt crisis has kept investors on edge for months.

Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were all up about 1% ahead of the opening bell. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

The U.S. economy grew at a 1.3% annual rate in the second quarter, more quickly than expected, according to the latest government report on gross domestic product. GDP, the broadest measure of the nation's economic activity, jumped from the previous reading of a 1% rise.

Meanwhile, the number of Americans filing for unemployment benefits last week dropped by 37,000 to 391,000. That reading came in much better than economists had the 419,000 claims they ha d predicted.

Europe remains in focus. Germany became the latest of the 17 countries in the eurozone to approve an overhaul of the European Financial Stability Facility, a bailout fund set up in the wake of the 2008 financial crisis.

Euro stability fund is a mirage

Investors were expecting Germany to approve the measure. Stock futures rose well in advance of the vote, and then their upward momentum slowed after it passed.

"The market has been under so much pressure recently, it seems like rallies are somewhat limited at this point until the wheels are in motion on this bailout," said Phil Streible, senior market strategist at MF Global.

On Wednesday, stocks closed down, ending a three-day winning streak for all three indexes.

Economy: Later in the morning, a report from the National Association of Realtors is expected to show pending home sales down 1.5% in July.

Companies: Shares of Nokia (NOK) rose 2.1% after the phone-maker said it will cut another 3,500 jobs in 2012 to reduce costs.

AMD (AMD, Fortune 500) shares fell 10.5% after the chipmaker cautioned investors it forecasts slower revenue growth in the third quarter than originally expected.

World markets: European stocks were mixed in afternoon trading. Britain's FTSE 100 (UKX) fell 0.8%, while the DAX (DAX) in Germany fell 0.5% and France's CAC 40 (CAC40) lost 0.2%.

Asian markets ended mixed. China's Shanghai Composite (SHCOMP) fell 1.1%, while Japan's Nikkei (N225) rose 1%, and the Hang Seng (HSI) in Hong Kong was closed due to a typhoon.

Currencies and commodities: The dollar fell against the euro and the Japanese yen, but rose against the British pound.

Oil for November delivery gained $1.17 cents to $82.36 a barrel.

Gold futures for December delivery fell 2 cents to $1,617.70 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.99%.  To top of page

Index Last Change % Change
Dow 30,932.37 -469.64 -1.50%
Nasdaq 13,192.34 72.91 0.56%
S&P 500 3,811.15 -18.19 -0.48%
Treasuries 1.46 -0.06 -3.82%
Data as of 8:44pm ET
Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
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