- POSTED: 26 Jun 2014 06:24
US stocks finished higher despite a US Commerce Department report that showed first-quarter economic activity contracted much more than previously thought.
NEW YORK: US stocks finished higher on Wednesday despite a US Commerce Department report that showed first-quarter economic activity contracted much more than previously thought.
The Dow Jones Industrial Average advanced 49.38 points (0.29 per cent) to 16,867.51.
The broad-based S&P 500 rose 9.55 (0.49 per cent) to 1,959.53, while the tech-rich Nasdaq Composite Index jumped 29.40 (0.68 per cent) to 4,379.76.
US gross domestic product fell at a 2.9 per cent annual pace in the first three months of 2014, much worse than the previous estimate of 1.0 per cent and the sharpest decline in five years.
The drop reflected weaker growth in consumer spending, a larger increase in exports and higher imports than previous estimates.
Analysts said the market essentially saw beyond the report, regarding it as backward-looking as more recent data shows growth picking up.
"Everybody in the investing world knows the winter was harsh, but it's in the rear-view mirror," said Bill Lynch, director of investment at Hinsdale Associates.
"The market is looking forward."
Broadcasters and cable companies gained after the US Supreme Court ruled that online television startup Aereo violated copyright laws by retransmitting broadcasts through antenna equipment. The court ruled Aereo effectively operates like a cable company and must therefore pay for broadcast rights.
CBS rose 6.2 per cent, Twenty-First Century Fox gained 2.0 per cent, Comcast rose 1.1 per cent and Time Warner Cable 1.3 per cent.
Oil refiners slumped after the US issued permits to two companies to export unrefined oil for the first time in four decades, potentially threatening domestic refining margins.
Marathon Petroleum fell 6.3 per cent, Phillips 66 lost 4.2 per cent, and Valero Energy dropped 8.3 per cent.
General Mills fell 3.6 per cent as fiscal fourth-quarter earnings came in at 65 cents per share, far below the 72 cents projected by analysts. General Mills said promotional spending in developed markets was "less effective than we planned and input cost inflation was a bit above our forecast."
Agrotech leader Monsanto jumped 5.1 per cent as third-quarter profits of 1.62 per share bested expectations by six cents. The company lifted its long-term profit targets and announced a $10 billion share repurchase plan.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.56 per cent from 2.59 per cent Tuesday, while the 30-year dropped to 3.38 per cent from 3.41 per cent. Bond prices and yields move inversely.