Stocks Jump For Second Day On Disappointing Economic Data

Michael Teague |

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.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
S Sprint Corporation 7.98 -0.01 -0.06 1,356,468
MU Micron Technology Inc. 18.69 -0.10 -0.53 3,887,842
MSFT Microsoft Corporation 59.87 0.62 1.05 2,295,480
WWWW Web.com Group Inc. n/a n/a n/a 0

Comments

Emerging Growth

Breathtec BioMedical Inc.

Breathtec Biomedical Inc is a medical diagnostics company. It is engaged in developing & commercializing breath analysis devices for the early detection of infections & life threatening diseases including cancers,…

Private Markets

Airbnb

Airbnb is a community marketplace for people to list, discover, and book unique accommodations around the world — online or from a mobile phone. Whether an apartment for a night,…

GoCoin

Blockchain currencies (e.g. Bitcoin) provide a new disruptive way to transfer value between parties over the internet as opposed to going through banks. GoCoin provides online merchants with a suite…