Oct 29, 2009 (MarketNewsVideo.com via COMTEX News Network) -- The Department of Commerce reported preliminary third quarter GDP numbers this morning that confirmed the country had pulled out of the recession and continued growth. The 3.5% growth in the quarter beat economists' estimates and pushed the markets higher on Thursday. On the week, however, the picture has not been as rosey. The Dow has dropped about one percent this week while the S&P 500 has lost about two percent, and the tech-heavy Nasdaq fell the most this week, losing three percent despite Thursday's recovery rally.
Technical traders are focusing on the S&P 500, as the index has bounced off its fifty day moving average multiple times since the rally has started. Each time the index has approached or crossed the orange line, the index has reversed course and continued rallying. With the rally in its eighth month, investors are concerned that the recent crossing may not result in another rally and that this could be a turning point for the markets.
Giving hope to the markets has been encouraging earnings reports across multiple sectors. The telecommunications sector saw earnings reports from Verizon (VZ) and Quest (Q) this week. Both companies reported strong earnings that were in-line with expectations, despite the year-over-year profit decines. The common theme in both earnings reports was the cancellation of landlines, as more and more customer are relying just on their wireless phones. Verizon has worked to position itself well for the transition as it has acquired Alltel to expand its wireless network and partnered with Google (GOOG) to compete with Apple (AAPL) and AT&T (T).
Investors were not as bullish on the telecom sector as the Vanguard Telecommunications ETF (VOX) was trading lower on the week, off more than three percent despite today's modest gains.
And the oil and gas sector saw mixed earnings this week from ConocoPhillips (COP), BP (BP) and Exxon Mobil (XOM). All three companies reported a decrease in earnings as oil prices have fallen sharply since the record highs of last year. BP reported earnings of $1.71 per share, easily beating estimates. Exxon Mobil narrowly missed the consensus estimates of $1.02 per share as the company earned $0.98. And ConocoPhillips failed to impress analysts as profits slide to about $1.00 per share.
Risk-taking investors were driving the oil and gas sector higher today as the ProShares Ultra Oil & Gas ETF (DIG) was trading higher by more than four percent today, but on the week shares were down about three and a half percent.
The preceeding is a transcript of the MarketNewsVideo.com video published at: http://www.marketnewsvideo.com/?id=200910SectorWrap102909&mv=1.
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