Closing Update: Stocks Regain Composure on Fed's Endorsement of Economy

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The FOMC's positive assessment of the U.S. economy and decision to scale back asset purchases by another $10 billion breathed new life into the stock market Wednesday after the dismal Q1 GDP revision threatened to halt Wall Street's two-day winning streak.

All major indices close with constructive gains, with the S&P 500 outperforming due to strength in telecom and utility stocks. The Dow Industrials rebounded off key support at 16,500, while the Nasdaq Composite recovered choppy trade to end higher.

The severe winter weather took a documented toll on the economy last quarter causing growth to come to near standstill. First quarter GDP was revised downward to only 0.1% from 2.6% initially, and much worse than an expected revision to 1.1%. While it was obvious that the data was skewed by bad weather, the knee-jerk reaction in the market sent stocks into negative territory, exacerbating an already defensive Nasdaq on disappointing results from Twitter ( TWTR ) and Ebay ( EBAY ).

But the defensive tone was mitigated by an earlier bullish report on the job market from ADP which found that private payrolls rose by a greater than expected 220,000 in April, beating forecasts of +210,000 and following an upwardly revised 209,000 in March. This is expected to translate into upward revisions to Friday's non-farm payroll report, currently at +215,000 new jobs in April.

Here's where the markets stand at the close:

US MARKETS

Dow Jones Industrial Index was up 45 points (+0.3%) at 16,580

S&P 500 was up 5 points (+0.3%) at 1,883

Nasdaq Composite Index was up 11 points (+0.3%) at 4,114

GLOBAL SENTIMENT

FTSE 100 was up 0.15%

Nikkei 225 was up 0.11%

Hang Seng Index was down 1.42%

Shanghai China Composite Index was up 0.30%

UPSIDE MOVERS

(+) ZA Reported weaker earnings compared to the year-ago period, but announced a dividend.

(+) UBIC Announced the commercial introduction of its Lit i View ANALYZER

(+) ALLT Sales beat street estimate and EPS matches; new CEO named

DOWNSIDE MOVERS

(-) NYMX Prostrate cancer drug study can't assess primary endpoint but shows benefit

(-) RM Reported a sharp decline in Q1 EPS, missing analyst estimates.

(-) POWI Results for Q1 fell short of analysts' expectations, provided revenue guidance for Q2 below Street forecasts.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: EBAY

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