By Wallace Witkowski and Victor Reklaitis, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks closed higher Wednesday, recovering from a weak revision of first-quarter
economic performance, as media stocks got a lift from a Supreme Court ruling and refinery stocks dropped on a weakening
of an oil export ban.
The S&P 500 Index (SPX) rose 9.55 points, or 0.5%, to end at 1,959.53, while the Dow Jones Industrial Average (DJI)
gained 49.38 points, or 0.3%, to finish at 16,867.51.
The S&P 500 and Dow both snapped two-day skids, but remain down for the week after closing at record levels on Friday.
The Nasdaq Composite Index (RIXF) climbed 29.40 points, or 0.7%, to close at 4,379.76, as Google Inc. ( GOOG ) kicked
off its annual I/O developers conference in San Francisco. The tech-heavy index scored its highest close since April
Orders for durable goods fell 1% in May, the Commerce Department said Wednesday. That was below the 0.5% expected by
economists surveyed by MarketWatch.
In addition, the U.S. economy shrank by a 2.9% annual pace in the first quarter instead of 1% as previously reported,
marking the biggest decline since early 2009 when the Great Recession was winding down. The economy has strengthened
since the first quarter, when it was hurt by an unusually harsh winter, with growth projected to rise roughly 3% in the
second quarter, which ends Monday.
Investors knew the GDP report would "stink, but not this much," said Naeem Aslam, chief market analyst at Ava Trade,
in emailed comments. But he said he expects "payback" in the current quarter, meaning "a strong reading."
"The initial reaction to the GDP report was exactly that, a kneejerk reaction," said Dan Greenhaus, BTIG, in emailed
Greenhaus pointed out that core durable-goods data, excluding defense spending, was actually good and that even the
less closely followed Markit PMI figure was better than expected, indicating the economy is in much better shape than
the revised first-quarter GDP data would suggest.
Peter Cardillo, chief market economist at Rockwell Global Capital, said Wednesday's two economic reports reinforce the
notion that the Federal Reserve won't raise interests rates sooner than expected, and he sees stocks staying in a narrow
trading range for the summer.
"For now, I just think the market holds its own here," Cardillo told MarketWatch. "I don't see an interruption of the
longer-term bull market, but rather just a pause."
That view of a narrow trading range for the summer was backed by Terry Sandven, chief equity strategist at U.S. Bank,
in a recent note.
"Among near-term catalysts, the June employment report scheduled for release on July 3 and second quarter earnings
results set largely to begin in the middle of July should set the tone for performance throughout the third quarter and
perhaps beyond," Sandven said.
Aereo ruling drives media stocks; refiners hurt by export ban development
Among individual stocks, Valero Energy Corp.(VLO) closed down 8.3%, faring worst among S&P 500 names, after the Wall
Street Journal reported late Tuesday the Obama administration was lightening the 40-year ban on crude oil exports.
Similarly, Marathon Petroleum Corp. (MPC) shares fell 6.3%, Phillips 66 (PSX) shares dropped 4.2%, and Tesoro Corp.
(TSO) shares also declined 4.2%.
Shares of Schlumberger Ltd. (SLB) closed up 6.4%, leading the S&P 500, after the oil-services company announced a
memorandum of understanding to discuss the sale and lease of oilfield equipment in Afghanistan to Bayat Energy.
CBS Corp. ( CBS ) was the second-best performer among S&P 500, and Gannett Co. ( GCI ) was a strong performer. CBS shares
rose 6.2%, and Gannett advanced 5.1% after the Supreme Court ruled against Internet TV startup Aereo.
(Read more in our Movers & Shakers column http://www.marketwatch.com/story/monsanto-barnes-noble-jump-general-mills-
In other markets, Japan's Nikkei Average fell 0.7%, along with other Asian stock markets. In Europe, the Stoxx Europe
600 pulled back.
U.S. benchmark crude-oil futures (CLQ4) rose, and gold futures (GCQ4) weakened.
More must-read stories from MarketWatch:
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