Stocks gain in early trading as GDP isn’t as weak as feared; Treasury prices fall

Stocks open higher after GDP report; bonds slip

NEW YORK — Stocks are opening higher and bond prices are slipping after a reading on economic growth came in better than expected.

The government early Friday lowered its estimate for how fast the U.S. economy grew in the second quarter, but not by as much as analysts had forecast.

The Commerce Department says gross domestic product grew at a 1.6 percent rate in the April-to-June period. Economists had expected a rate of 1.4 percent.

In the first minutes of trading, the Dow Jones industrial average rose 55, or 0.6 percent, to 10,040. The Standard & Poor’s 500 Index rose 6, or 0.5 percent, to 1,053 and the Nasdaq composite index rose 13, or 0.6 percent, to 2,131.

The yield on the 10-year Treasury rose to 2.54 percent from 2.50 percent.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

NEW YORK (AP) — Stocks are heading for a higher opening and bond prices are slipping after a reading on economic growth came in better than expected.

The government early Friday lowered its estimate for how fast the U.S. economy grew in the second quarter, but not by as much as analysts had forecast.

The Commerce Department says gross domestic product grew at a 1.6 percent rate in the April-to-June period. That’s still way down from the government’s earlier estimate of 2.4 percent but not as bad as the 1.4 percent expected by economists.

Traders responded by sending stock futures higher and bond prices lower as they set aside some of their worst concerns about how poorly the economy was doing. They were also looking ahead to a speech later Friday by Federal Reserve Chairman Ben Bernanke for more clues on the economy and whether the central bank might be considering more steps to revive it.

Dow Jones industrial futures are up 55, or 0.6 percent, at 10,022. Standard & Poor’s 500 futures are up 7.00, or 0.7 percent, at 1,051.80. Nasdaq 100 futures are up 15.25 or 0.9 percent, at 1,782.75.

The yield on the 10-year Treasury note rose to 2.55 percent, above the 2.50 percent yield it was trading at before the GDP numbers came out. Its price fell 56.25 cents to $100.656. Bond yields rise when their prices fall.

The Dow closed below 10,000 Thursday, the first time since early July that it finished under that milestone. Investors have been generally pessimistic about the economy in the past few weeks, but stock moves have also been skewed because many traders are on vacation.

In corporate news, 3Par said it’s accepting Dell Inc.’s new acquisition offer of $1.8 billion. Dell matched a bid from Hewlett-Packard Co.

Tiffany & Co. offered an upbeat view of the slice of the economy it serves: upscale shoppers. The luxury jeweler raised its earnings outlook for the year. The company’s second-quarter earnings beat analyst expectations, but its revenue fell short of forecasts.

European shares also moved higher after the better-than-expected figures on U.S. economic growth came out.

In London, the FTSE-100 index rose 0.6 percent in afternoon trading, while the DAX 0.4 percent and the CAC-40 in Paris rose 0.6 percent. In Asia, Japan’s Nikkei 225 closed up 1 percent.