Investing.com - U.S. stocks rose on Wednesday after official data revealed the country's revised gross domestic product rate grew less than expected in the first quarter and sparked some investors to delay their forecasts as to when Federal Reserve may taper stimulus programs.
Stocks also saw demand from other investors betting that economy is gaining steam despite softer-than-expected growth rates, which will bring stocks rising in the long run.
At the close of U.S. trading, the Dow Jones Industrial Average finished up 1.02%, the S&P 500 index ended up 0.96%, while the Nasdaq Composite index rose 0.85%.
In the U.S. earlier, the Commerce Department said gross domestic product expanded at an annual rate of 1.8% in the three months to March, below an earlier estimate of 2.4% growth.
Economists had expected the growth rate to remain unchanged at 2.4%.
The report said consumer spending was revised down from 3.4% to 2.6%.
The numbers stoked expectations for the Federal Reserve to put off scaling back stimulus measures such as the U.S. central bank's monthly USD85 billion bond-buying program, which tend to push up stock prices as a side effect.
Still, stocks saw parallel demand from investors who shrugged off the data and predicted stocks to begin longer-term gains on the coattails of improving economic fundamentals, especially in wake of recent manufacturing, confidence and housing-sector reports that beat expectations.
U.S. consumer confidence, for example, rose to its highest level since January 2008 this month.
The Conference Board said on Tuesday that its index of U.S. consumer confidence rose to 81.4 in June from 74.3 in May, well above expectations for a reading of 75.4.
Elsewhere, the Commerce Department said Tuesday that U.S. orders for durable goods rose 3.6% in May, outstripping expectations for a 3.0% gain, which also fueled the rally along with good news out of the housing market.
The Commerce Department said U.S. new home sales rose by 2.1% to 476,000 units in May, the highest level since July 2008 and well above expectations for an increase of 1.3% to 462,000.
Home prices are on the rise as well.
The Standard & Poor's/Case-Shiller 20-city house price index rose 12.1% in April from a year earlier, above expectations for a 10.6% increase.
U.S. home prices in March rose by 10.9%.
Leading Dow Jones Industrial Average performers included Boeing, up 2.10%, Home Depot, up 2.08%, and Microsoft, up 2.02%.
The Dow Jones Industrial Average's worst performers included Alcoa, down 2.15%, Caterpillar, down 0.27%, and IBM, down 0.03%.
European indices, meanwhile, finished higher after European Central Bank President Mario Draghi said earlier that monetary policy would remain loose for the foreseeable future.
After the close of European trade, the EURO STOXX 50 rose 2.34%, France's CAC 40 rose 2.09%, while Germany's DAX 30 finished up 1.66%. Meanwhile, in the U.K. the FTSE 100 finished up 1.04%.
On Thursday, the U.S. is to release the weekly government report on initial jobless claims along with data on personal income and expenditure, which is to be followed by private sector data on pending home sales.
Stocks also saw demand from other investors betting that economy is gaining steam despite softer-than-expected growth rates, which will bring stocks rising in the long run.
At the close of U.S. trading, the Dow Jones Industrial Average finished up 1.02%, the S&P 500 index ended up 0.96%, while the Nasdaq Composite index rose 0.85%.
In the U.S. earlier, the Commerce Department said gross domestic product expanded at an annual rate of 1.8% in the three months to March, below an earlier estimate of 2.4% growth.
Economists had expected the growth rate to remain unchanged at 2.4%.
The report said consumer spending was revised down from 3.4% to 2.6%.
The numbers stoked expectations for the Federal Reserve to put off scaling back stimulus measures such as the U.S. central bank's monthly USD85 billion bond-buying program, which tend to push up stock prices as a side effect.
Still, stocks saw parallel demand from investors who shrugged off the data and predicted stocks to begin longer-term gains on the coattails of improving economic fundamentals, especially in wake of recent manufacturing, confidence and housing-sector reports that beat expectations.
U.S. consumer confidence, for example, rose to its highest level since January 2008 this month.
The Conference Board said on Tuesday that its index of U.S. consumer confidence rose to 81.4 in June from 74.3 in May, well above expectations for a reading of 75.4.
Elsewhere, the Commerce Department said Tuesday that U.S. orders for durable goods rose 3.6% in May, outstripping expectations for a 3.0% gain, which also fueled the rally along with good news out of the housing market.
The Commerce Department said U.S. new home sales rose by 2.1% to 476,000 units in May, the highest level since July 2008 and well above expectations for an increase of 1.3% to 462,000.
Home prices are on the rise as well.
The Standard & Poor's/Case-Shiller 20-city house price index rose 12.1% in April from a year earlier, above expectations for a 10.6% increase.
U.S. home prices in March rose by 10.9%.
Leading Dow Jones Industrial Average performers included Boeing, up 2.10%, Home Depot, up 2.08%, and Microsoft, up 2.02%.
The Dow Jones Industrial Average's worst performers included Alcoa, down 2.15%, Caterpillar, down 0.27%, and IBM, down 0.03%.
European indices, meanwhile, finished higher after European Central Bank President Mario Draghi said earlier that monetary policy would remain loose for the foreseeable future.
After the close of European trade, the EURO STOXX 50 rose 2.34%, France's CAC 40 rose 2.09%, while Germany's DAX 30 finished up 1.66%. Meanwhile, in the U.K. the FTSE 100 finished up 1.04%.
On Thursday, the U.S. is to release the weekly government report on initial jobless claims along with data on personal income and expenditure, which is to be followed by private sector data on pending home sales.