- POSTED: 01 May 2014 05:13
The Dow Jones Industrial Average on Wednesday closed at a new record after the Federal Reserve said the US economy was picking up following a winter slowdown.
NEW YORK: The Dow Jones Industrial Average on Wednesday closed at a new record after the Federal Reserve said the US economy was picking up following a winter slowdown.
The Dow advanced 45.47 points (0.27 percent) to 16,580.84, notching its first all-time high of 2014. The last record close, 16,576.66, was set on December 31.
The S&P 500 rose 5.62 points (0.30 percent) to 1,883.95, while the tech-rich Nasdaq Composite Index added 11.01 points (0.27 percent) at 4,114.56.
The Fed, concluding a two-day policy meeting, said economic activity "has picked up recently after having slowed sharply during the winter in part because of adverse weather conditions."
The central bank, as expected, continued a plan to gradually taper its bond-buying stimulus programme, while maintaining ultra-low interest rates.
The Fed's positive outlook outshone a disappointing report from the Commerce Department, which said gross domestic product grew by a scant 0.1 percent annual rate in the first quarter.
Sam Stovall, chief investment strategist at S&P Capital IQ, said sentiment has improved thanks to solid corporate earnings, better economic data and stock valuations that are reasonable.
But Stovall cautioned that weakness in the Nasdaq, if it persists, "could have a dampening effect."
Michael James, managing director of equity trading at Wedbush Securities, said the new Dow record shows investor money has been flowing from trendy tech stocks to "more stable, less sexy names" in heavy industry.
James said the continued weak performance of the Nasdaq diminishes the significance of the Dow record. "I don't think it matters that much," he said.
Twitter closed at a record low of $38.97 after the company disclosed that it had 255 million active monthly users in March, below the 257 million projected by Wall Street, according to BMO Capital Markets. Shares tumbled 8.6 percent.
Investors also turned against online retail giant eBay, which reported a loss of $2.3 billion on a large tax charge and projected second-quarter profit of 67-69 cents per share, below the 70 cents expected. Shares dived 5.0 percent.
But Time Warner got a lift after reporting earnings of $1.3 billion, 71 percent above the year-ago level and better than analysts expected. Shares rose 2.7 percent.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.65 percent from 2.70 percent on Tuesday, while the 30-year slid to 3.46 percent from 3.49 percent. Bond prices and yields move inversely.