The Bureau of Economic Analysis on Wednesday put out its third estimate of first-quarter GDP growth in the U.S., revising its prior reading of 2.4 percent down to 1.8 percent. The report also revised growth in personal consumption from 3.4 percent down to 2.6 percent, citing slower than expected personal consumption expenditures as well as a decline in imports and exports.
Stocks were already on their way up, however, and were pushed further in that direction. Investors have been reacting positively to comments from various Federal Reserve officials who have been reassuring markets by walking back the perceived “hawkishness” of Chairman Ben Bernanke’s statements in a press conference last week to the effect that the end of quantitative easing could come as early as one year from now.
A great part of the Fed’s reassurances have hinged on the fact that, taper or not, fiscal stimulus would continue to be the rule of the day until such time as employment and inflation meet targets that still appear to be far off on the horizon. This is potentially creating a situation in which disappointing economic data points are actually seen as a positive on Wall Street, as it presumably guarantees the continuation of the Central Bank’s asset purchases
The S&P 500 was up 0.96 percent to close out the day at 1,603.26 points, while the Dow jumped 1.02 percent to end at 14,910.14, and the Nasdaq was up 0.85 percent to 3,376.33 points.
Tech stocks held up the S&P 500, with high-volume gains for Sprint (S), Microsoft (MSFT) and Micron Technology (MU), among others, while all but three of the Dow’s components ended the day in the positive.
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