US stocks climbed for a second straight day yesterday as a downward revision in the growth rate of gross domestic product soothed investors’ concerns that the Federal Reserve would begin to withdraw its stimulus in the near future.
The economy grew at an annual rate of 1.8 per cent in the first quarter, according to the Commerce Department’s final estimate of gross domestic product.
That was well below expectations for growth at a 2.4 per cent annual rate.
The three major US stock indexes surged at the open and extended gains in the afternoon, with the S&P 500 moving back above the key technical level of 1,600 for the first time since last Thursday.
The rally was broad, with all 10 industry sectors in the S&P 500 advancing.
The healthcare, consumer discretionary and financial sectors ranked among the session’s biggest gainers.
While the GDP data looks backward and includes the start of cutbacks in federal spending, analysts said it could influence Fed considerations of whether the economy is strong enough for it to begin scaling back its $85bn in monthly bond purchases.
The Dow Jones industrial average rose 149.83 points or 1.02 per cent, to end at 14,910.14. The S&P 500 gained 15.23 points or 0.96 per cent, to finish at 1,603.26. The Nasdaq Composite added 28.34 points or 0.85 per cent, to close at 3,376.22.
New York Report