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Dow surges on strong GDP growth, shrinking unemployment claims

Stocks rose Thursday on the strength of better-than-anticipated economic growth in the fourth quarter as well as a drop in jobless claims, although investors remain nervous ahead of anticipated interest rate hikes by the Federal Reserve. The Dow Jones Industrial Average surged as much as 600 points in early trading. It recently was up by more than 200 points — or 0.64% — as of noon ET Thursday while the S&P 500 was up by 0.8%. The Nasdaq also saw gains of 0.22%, inching 30 points higher. The bounce followed steep declines in the market as record-high levels of inflation, the ongoing spread of the Omicron variant, and the prospect of a Russian invasion of Ukraine has made Wall Street jittery. “I think investors are buying value,” Jake Dollarhide, CEO of Tulsa-based Longbow Asset Management, told The Post. “They’re seeing a dip in the markets … so they’re seeing that as an indicator to buy at these levels.” The markets reacted positively to new federal government data showing that gross domestic product jumped 6.9% in the last three months of 2021 — a significant improvement from the projected rate of 5.5% and the third-quarter growth rate of 2.3%. “Anytime good economic news comes out, investors tend to reward the stock market by making it rise,” Dollarhide said, though he cautioned that he didn’t expect the indexes to recover from their recent slide. “The markets are very nervous right now,” he said. “Inflation is a worry to all … and the interest rate hikes by the Fed will make things more expensive for investors going forward.” see also According to the Bureau of Economic Analysis, personal consumption hit 3.3% — near the anticipated rate of 3.4% and an increase from the 2% in the third quarter. The GDP grew a total of 5.7% in 2021 — the fastest growth in a one-year period since 1984. In 2020, the economy shrank by 3.4% as the country was in the throes of the coronavirus pandemic. The economy was also buoyed by the shrinking number of jobless claims — an indication that the country is recovering from the disruptions caused by the spreading Omicron variant. Workers filed 260,000 initial jobless claims for the week ending on Jan. 22, the Labor Department said in a release. The number of claims was down 30,000 compared to the previous week’s revised tally, when claims unexpectedly surged to 290,000. But analysts said the near future could be a bumpy ride for investors as the central bank prepares to withdraw stimulus from the markets in an attempt to tame rampant inflation. The Federal Reserve indicated Wednesday that it will hike interest rates in March for the first time in three years. The central bank previously signaled it would wait for the US economy to achieve maximum employment before hiking rates.

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