S&P, Nasdaq hit records as GDP disappoints and Biden spending plan moves ahead

U.S. stock indexes rallied to record highs Thursday as traders parsed through earnings reports and digested the disappointing third-quarter gross domestic product reading while awaiting further details on the framework of President Biden's economic plan.

The Dow Jones Industrial Average rose 239 points, or 0.67%, while the S&P 500 index and the Nasdaq Composite index advanced 0.98% and 1.38%, respectively. Both the S&P and the Nasdaq finished at all-time highs as the Dow closed 27 points below its own peak.  

The U.S. economy grew at a 2% annual rate in the three months through September, missing the 2.7% growth that analysts surveyed by Refinitiv were expecting. The disappointing reading came as consumer spending slowed due to a resurgence in new COVID-19 cases and supply-chain bottlenecks. A separate report showed jobless claims fell to a pandemic-era low. 

Biden's "Build Back Better" agenda took a step forward with the president announcing the framework for the plan. The announced $1.75 trillion package has not been evaluated by the Congressional Budget Office or any independent watchdogs, and progressives want to vote on both the reconciliation bill and the bipartisan infrastructure bill on the same day. House Speaker Nancy Pelosi is said to be considering bringing the latter to vote later on Thursday.  

In stocks, Dow component Caterpillar Inc. beat on earnings but missed on revenue as supply chain bottlenecks made it more difficult to fill customer orders. The heavy machinery maker expects sales to improve in the current quarter.   

Fellow Dow member Merck & Co. raised its full-year profit forecast following strong demand for its cancer drug Keytruda. The drugmaker saw sales of non-COVID-19 vaccines bounce back as patients took more trips to the doctor’s office. 

Elsewhere, Ford Motor Co. shares hit a 7-year high after the automaker raised its full-year profit guidance on strong demand for trucks. 

Hershey Co. reported earnings and revenue that exceeded forecasts and hiked its full-year outlook. The candy maker said stronger-than-expected demand, an improved tax outlook and brand investment would more than offset supply chain disruptions and inflation.   

Meanwhile, Facebook CEO Mark Zuckerberg said as of Dec. 1 the company will be called "Meta." Shares On that same date, shares will transition to the stock ticker MVRS. 

Amazon Inc., Apple Inc., Starbucks Corp. and U.S. Steel Corp. are among the companies reporting their quarterly results after markets close.     

In commodities, West Texas Intermediate crude oil rose 15 cents to $82.81 a barrel as gold ticked up $3.80 to $1,801.60 an ounce.  

Overseas markets were mostly lower. 

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In Europe, Germany’s DAX 30 slipped 0.06% and France’s CAC 40 jumped 0.75% after the European Central Bank kept policy on hold. Britain’s FTSE 100, meanwhile, was weaker by 0.21%. 

Asian bourses were weaker across the board with Hong Kong’s Hang Seng index losing 0.28%, Japan’s Nikkei 225 sliding 0.96% and China’s Shanghai Composite declining 1.23%.