Aug 29 - Summary: Stocks held gains sparked by a robust revision to second-quarter growth figures and a drop in jobless claims; Verizon, Vodafone chatting up wireless deal; Ford brings jobs back to Detroit. Conway G. Gittens reports.
Wall Street is now two-for-two as the U.S. economy surprises to the upside. Gains were modest though as investors wait for clarity on how the West will deal with Syria. As for the economy, second-quarter growth was revised to a stronger-than-expected 2-1/2 percent, which was double the rate of growth at the start of the year. Stronger exports, inventory restocking, and strength from the housing sector offsetting a continued pullback in government spending and slower consumer activity. Weekly jobless claims were also encouraging. First-time applications fell last week, suggesting a pick-up in hiring last month. Signs of a firmer economy doing little to change expectations for the Federal Reserve. Curtis Arledge of BNY Mellon thinks the Fed will begin slowing bond purchases as early as September, but he adds a caveat. SOUNDBITE: CURTIS ARLEDGE, CEO OF INVESTMENT MANAGEMENT, BNY MELLON (ENGLISH) SAYING: "This may not be the end of central bank support. They may pullback for a while. I think the economy may feel it and such that the economic activity that we are all hoping will continue - actually we start to lose momentum and the central banks will have to come back and help it out." Verizon Wireless is the big corporate story of the day. Its parents Verizon and Vodafone are working on a deal that could put the wireless unit entirely in the hands of Verizon for around $130 billion, according to a person familiar with the matter. Sources predict a deal could be announced next week. Verizon Wireless is the No. 1 mobile service provider in the U.S. Shares of Verizon were up on the day, while U.K. partner Vodafone touched a 12-year high. Ford is bringing back jobs to the Detroit area. 14-hundred new workers will be used to ramp up production of the Ford Fusion. A factory in Mexico was unable to keep up with demand for the Fusion, which is Ford's second-best selling model this year, so the new plant is coming online. The new jobs are part of Ford's plan to hire 12,000 hourly workers by the year 2015. European markets edged higher with gains powered by the Vodafone deal that's in the works.