By Geoffrey Smith
Investing.com -- U.S. stock markets opened higher again on Thursday as a big miss in second-quarter gross domestic product bolstered expectations of continued liquidity support from the Federal Reserve.
A rebound in Chinese stocks overnight also helped the tone, after Chinese market regulators held a call with major banks and investors in an effort to reassure them that the measures taken against online tutoring companies earlier this week are an exceptional case.
By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was up 200 points, or 0.6%, at 35,131 points, while the S&P 500 was up 0.5% and the Nasdaq Composite was up by 0.2%
The Nasdaq's underperformance was in part due to a 2.9% drop by Facebook (NASDAQ:FB) stock after it warned late on Wednesday of a slowdown in advertising revenue later this year. PayPal (NASDAQ:PYPL)and Uber (NYSE:UBER) stock also weighed, with the payments company falling 5.1% after reporting fewer new users than hoped for in the second quarter. Uber fell 3.9% after news that Softbank (OTC:SFTBY) is selling down its stake.
Earlier, the Bureau of Economic Analysis said the U.S. economy had grown at an annualized rate of 'only' 6.5% in the second quarter, well below expectations for a rise of 8.5% and only a slight acceleration from 6.4% in the first quarter. Additionally, there was fresh evidence of the labor market recovery struggling, with the total number of people claiming unemployment benefits rising by more than 500,000 to over 13.15 million. Initial jobless claims, which are one week fresher, stayed stuck at 400,000, instead of falling to 380,000 as expected.
Among the big gainers were Didi Global ADR (NYSE:DIDI), which rose 11% after The Wall Street Journal reported that its backers are preparing to take the ride-hailing company private again in an attempt to appease Chinese regulators. These had advised Didi against listing in New York before a review of its data policies was complete.
Zoom Video stock was another conspicuous winner after a number of surveys suggesting that more people than expected will continue working from home, at least partially, even after the pandemic. Various companies have already softened their stance on bringing workers back into the office full time as the Delta variant of Covid-19 has driven a surge in case numbers across the U.S. Other big gainers included Ford Motor (NYSE:F), whose second-quarter earnings late on Wednesday topped expectations, and Mastercard (NYSE:MA) stock, which rose after the card company profited from a revival of leisure travel in the quarter.
Elsewhere, Workhorse stock rose 4.0% after it said it will part ways with CEO Duane Hughes. The maker of electric delivery trucks had had a wild ride through the 'Meme Stock' frenzy, before falling out of fashion after losing a key tender from the U.S. Postal Service. Also in the electric vehicles space, former Nikola (NASDAQ:NKLA) CEO Trevor Milton was indicted for making false and misleading statements. Nikola stock fell 9%.
Thursday is the first day of trading on Nasdaq for Robinhood (NASDAQ:HOOD) stock, which was priced at $38, the bottom end of the marketing range for its IPO, on Wednesday. The after-hours session is likely to be dominated by Amazon (NASDAQ:AMZN)'s second-quarter earnings.