China's gross domestic product rose 4.9% annually in the third quarter, signaling that the worst of the pandemic-induced downtrend had passed. | Image: WANG Zhao / AFP
The Dow and broader U.S. stock market traded higher on Monday, as investors remained cautiously optimistic about the global economic recovery following China’s latest GDP reading.
All of Wall Street’s major indexes traded in positive territory, mirroring a positive pre-market for stock futures . The Dow Jones Industrial Average rose by as much as 105 points before paring gains.
The broad S&P 500 Index of large-cap stocks gained 0.2%, The technology-focused Nasdaq Composite Index climbed 0.3%.
Most primary sectors tracked by the S&P 500 reported gains. Consumer discretionary stocks were the best performers, followed by healthcare and information technology.
China’s recovery from the Covid-19 pandemic is picking up speed, as the world’s second-largest economy looks poised to avoid recession this year.
Beijing reported Monday that gross domestic product–the value of all goods and services produced in the economy–grew 4.9% annually in the third quarter. Although smaller than the 5.2% gain analysts were expecting, the reading was a notable improvement from the 3.2% China recorded in the second quarter.
Watch the video below for more:
“Economic growth of the first three quarters shifted from negative to positive,” China’s National Bureau of Statistics said .
In a flurry of economic releases Monday, China said retail sales grew 3.3% annually in September. Industrial production rose 6.9% over the same period. Fixed asset investment edged up 0.8% annually in the year to September.
Altaf Kassam of State Street Global Advisors told The Wall Street Journal :
If you are looking at the consumer numbers, the manufacturing numbers, they’re still very strong coming out of China. That’s starting us off on a positive tone, and we think that’s a theme that’s going to continue.
The United States will release its first estimate of Q3 GDP data later this month. The latest Atlanta Fed estimate shows the economy rebounding 35.2% annually between July and September.
Analysts believe a second round of direct stimulus to Americans is necessary to keep the economic recovery alive. Congress is expected to debate the matter this week after House Speaker Nancy Pelosi set a Tuesday deadline for a stimulus vote.