GE, Alphabet Lead Stocks Higher After Strong Economic Report

NEW YORK (AP) -
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U.S. stocks are rising Friday after the government said the economy broke out of its recent slump and grew faster than expected during the third quarter. Industrial and technology companies are making some of the largest gains as General Electric and Alphabet climb. Health-care companies are sinking after weak results from prescription-drug maker McKesson and biotech giant Amgen.

KEEPING SCORE: The Dow Jones Industrial Average added 58 points, or 0.3 percent, to 18,222 as of 11:30 a.m. Eastern time. The Standard & Poor’s 500 index picked up 5 points, or 0.2 percent, to 2,137. The Nasdaq composite rose 5 points, or 0.1 percent, to 5,220.

GROWTH AT LAST: The U.S. economy broke out of a recent slump and grew at the fastest pace in two years between July and September. The Commerce Department said exports grew and more businesses restocked their shelves. In total, gross domestic product grew 2.9 percent, which was better than economists had expected. Growth had slowed down earlier this year, causing worry among investors.

FEELING LUCKY: Alphabet, Google’s parent company, reported strong third-quarter results. Its profit and revenue were better than expected as YouTube gains more ad dollars. The stock rose $17.67, or 2.2 percent, to $835.03.

Payment processor MasterCard also lent the technology sector a hand as it rose $3.81, or 3.7 percent, to $107.41 after reporting that its credit-card transactions climbed in the third quarter. Elsewhere, Facebook picked up $2.50, or 1.9 percent, to $132.17.

NOT PRIME: Amazon sank after its profit fell short of analyst estimates and the company’s outlook was weak. The stock is trading at all-time highs and has surged more than 30 percent over the last 12 months. In morning trading it fell $36.71, or 4.5 percent, to $781.59.

DEAL TALK: General Electric and oil and gas drilling services company Baker Hughes rose after The Wall Street Journal said the companies were discussing a deal that would combine Baker Hughes with a GE energy business. Baker Hughes tried to merge with competitor Halliburton two years ago, but the companies walked away from the combination after the federal government sued to block it. GE added 55 cents, or 1.9 percent, to $29.18 and Baker Hughes gained $2.84, or 5.2 percent, to $57.39.

BITTER PILL: Prescription-drug distributor McKesson plunged to a three-year low after its revenue fell about $1.5 billion short of estimates. The company slashed its annual outlook because of changes in drug prices. McKesson tumbled $37.12, or 23.1 percent, to $123.38. Competitor AmerisourceBergen lost $9.44, or 11.9 percent, to $70.06 while Cardinal Health shed $8.05, or 10.8 percent, to $66.75. Those steep losses helped pull health-care stocks lower.

ENERGY: Energy companies also made big gains. Chevron rose $3.54, or 3.5 percent, to $103.46 after it reported results that were stronger than expected. But Exxon Mobil lost $1.02, or 1.2 percent, to $85.90 after its revenue fell far short of estimates.

U.S. crude fell 26 cents to $49.46 a barrel in New York. Brent crude, the international standard, lost 25 cents to $51.35 a barrel in London. Energy companies were little changed overall.

AMGEN AILING: Amgen, the world’s largest biotech drug company, reported solid results for the third quarter and raised its guidance. But the company also disclosed flat sales of the anti-inflammatory medication Enbrel, its top-selling drug. Enbrel will soon face more competition, which could hurt sales. It gave up $16.54, or 10.3 percent, to $144.03. Drugmaker AbbVie disclosed weak sales and lost $4.45, or 7.2 percent, to $57.01.

SKUNKED BEER: AB InBev cut its annual revenue forecast following weak results from its business in Brazil. The world’s largest beer maker fell $3.91, or 3.2 percent, to $117.55.

HANES UP: Hanesbrands climbed as investors were pleased with its forecasts for the fourth quarter. The underwear, T-shirt and sock maker added $2.51, or 10.5 percent, to $26.31.

CROWNED: Royal Caribbean Cruises, which has fallen by almost a third this year, traded higher after its third-quarter profit came in ahead of estimates. The stock gained $6.06, or 8.9 percent, to $74.11.

BONDS: Bond prices were steady. The yield on the 10-year Treasury note remained at 1.85 percent.

CURRENCIES: The dollar rose to 105.44 yen from 105.29 yen. The euro rose to $1.0928 from $1.0898.

OVERSEAS: Germany’s DAX edged down 0.3 percent, while France’s CAC 40 held steady. Britain’s FTSE 100 fell 0.2 percent. Japan’s benchmark Nikkei 225 gained 0.6 percent and South Korea’s Kospi fell 0.2 percent. In Hong Kong, the Hang Seng lost 0.8 percent.