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S&P 500 sets record high after GDP data

English.news.cn   2014-05-30 04:07:22

NEW YORK, May 29 (Xinhua) -- U.S. stocks rose Thursday, with the S&P 500 logging both record intraday and closing highs, as investors brushed off the downwardly-revised U.S. gross domestic product (GDP) for the first quarter of the year.

The broader S&P 500 added 10.25 points, or 0.54 percent, to 1, 920.03, a session high, eclipsing both its previous record closing and intraday highs set on Tuesday and Wednesday respectively.

The Dow Jones Industrial Average rose 65.56 points, or 0.39 percent, to 16,698.74. The Nasdaq Composite Index gained 22.87 points, or 0.54 percent, to 4,247.95.

The three indices rose in five sessions of the past six, as investors were increasingly growing optimistic with how the U.S. economy is faring, dismissing the worse-than-expected GDP number as temporary phenomenon which largely resulted from abnormally cold winter.

The broader S&P 500 touched a new high minutes after the opening bell before regaining further steam and refreshing record highs repeatedly later in the session.

The U.S. economy shrank at an annual rate of 1 percent in the first quarter on weaker-than-expected trade and private investment amid the brutally cold weather, according to the Commerce Department's revised estimate of real GDP released Thursday morning.

It was the first contraction since the first quarter of 2011 when the GDP decreased 1.3 percent, and reversed the government's initial estimate of an anemic 0.1-percent growth.

"Looking ahead, the big downward revision to inventories means second-quarter growth is likely to be even stronger than previously thought," FTN Financial Chief Economist Chris Low said in a note Thursday.

Moreover, some traders expected the lackluster number to propel the U.S. Federal Reserve to maintain its extremely accommodative monetary policy for a longer time, which lifted market enthusiasm on Wall Street.

Also adding optimism were falling U.S. jobless claims last week. In the week ending May 24, the advance figure for seasonally adjusted initial claims was 300,000, a decrease of 27,000 from the previous week's revised level, the Labor Department reported Thursday. The decline was more than analysts had expected.

"The claims data have been bouncing around in recent weeks ( which is normal for the series), but the trend in the data is indicative of some recent improvement in the labor market," J.P. Morgan economist Daniel Silver said in a research note.

Additionally, U.S. pending home sales improved for the second straight month in April, with the pending home sales index, a forward-looking indicator based on contract signings, increasing 0. 4 percent to 97.8 in April from 97.4 in March, according to the National Association of Realtors. But the reading still trailed market consensus.

The CBOE Volatility Index, a gauge of fear in the market, decreased 0.94 percent to end at 11.57 Thursday.

In other markets, oil prices gained as a government report showed that crude inventories at Cushing, the delivery point for the U.S. crude contract, unexpectedly dropped last week.

Light, sweet crude for July delivery rose 86 cents to settle at 103.58 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery gained 16 cents to close at 109.97 dollars a barrel.

Gold futures on the COMEX division of the New York Mercantile Exchange notched a four-day losing streak amid a rising appetite for risky assets around the world, with the most active gold contract for August delivery down 2.6 dollars, or 0.21 percent, to settle at 1,257.1 dollars per ounce.

The U.S. dollar retreated against major currencies on the worse- tan-expected first-quarter U.S. growth rate.

In late New York trading, the euro rose to 1.3602 dollars from 1.3594 dollars in the previous session. The dollar bought 101.73 Japanese yen, lower than 101.86 yen of the previous session.

Editor: yan
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