Investors brushed aside data showing weak first-quarter economic
growth, which was tied to the severe winter that hampered exports
and hit investment spending.
The Fed said in a statement it would reduce its monthly bond
purchases to $45 billion from $55 billion, as expected. That will
keep it on track to end the program as soon as October.
That the Fed looked past a dismal reading on first-quarter growth
reinforced the view that weather was to blame for the weakness,
"They are seeing some economic activity pick up after the slowdown
during the winter," said Joe Bell, senior equity analyst at
Schaeffer's Investment Research in Cincinnati. That "is one positive
Nine of the 10 S&P 500 sectors ended in the black, led by the
economically-sensitive S&P materials sector <.SPLRCMA>, up 0.8
percent. Exxon Mobil <XOM.N>, up 0.9 percent at $102.41, led gains
on the S&P 500.
The Dow Jones industrial average <.DJI> rose 45.47 points or 0.27
percent, to 16,580.84, a record high close. It was the first record
close of the year for the Dow.
The S&P 500 <.SPX> gained 5.62 points or 0.3 percent, to 1,883.95
and the Nasdaq Composite <.IXIC> added 11.013 points or 0.27
percent, to 4,114.556.
For the month, the Dow and S&P 500 posted slight gains, while the
Nasdaq dropped 2 percent following weeks of heavy selling in tech
and biotech "momentum" stocks. The Dow was up 0.7 percent in April;
the S&P 500 was up 0.6 percent.
Stocks were near steady for most of the session, then slowly edged
to session highs following the Fed announcement.
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EBay <EBAY.O> was among the biggest negative influences on both the
S&P 500 and Nasdaq. Its shares fell 5 percent to $51.83, a day after
it forecast lower-than-expected earnings this quarter.
Twitter <TWTR.N> shares fell 8.6 percent to $38.97 and hit a record
intraday low of $37.25, a day after posting lackluster user and
Early in the session, data showed gross domestic product expanded at
a 0.1 percent annual rate in the first quarter, the slowest since
the fourth quarter of 2012, as exports and inventories weighed, but
activity already appears to be bouncing back.
In another report, however, U.S. private employers beat expectations
by adding 220,000 workers in April, the most since November, and
gains in the prior month were revised up.
After the bell, shares of Yelp Inc <YELP.N>, the operator of
consumer review website Yelp.com, rose 4 percent to $60.67 as it
reported a 66 percent rise in quarterly revenue.
About 6.8 billion shares changed hands on U.S. exchanges, above the
6.6 billion April average, according to data from BATS Global
(Editing by Bernadette Baum and Nick Zieminski)
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