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Closing Update: Stocks Higher After Weak GDP Blamed on Weather

By: MT Newswires
Posted: 6/25/2014 4:14:00 PM
Referenced Stocks: AMZN

The U.S. stock market dismissed surprisingly weak economic data and closed modestly higher as bargain-hunting after Tuesday's triple-digit rout in the Dow Industrials erased early morning losses. Investors wrote off a 2.9% Q1 GDP contraction, blaming weather and deep cuts in healthcare spending. It was the biggest drop in economic growth in more than five years. Even an unexpected decline in durable goods orders failed to put much of a dent in the rebound in equities as the 1% drop was largely a result of a double-digit cut in defense orders.

Before this morning's data, stock futures were slightly defensive due to Monday's sell-off and mounting geo-political pressures after Iraqi insurgents attacked the country's largest airbase. The knee-jerk reaction to both GPD and durable goods briefly extended the pre-market losses until closer examination of both indicators revealed seasonal aberrations and one-off factors. Cheaper stocks lured bargain-hunters, reversing losses within the first hour of trading. The grind higher was solidified by a 4 ½ year high in the purchasing manager's services index for June which improved to 61.2 from May's 58.1.

Here's where the markets stand at the close:

US MARKETS

Dow Jones Industrial Index was up 49 points (+0.3%) at 16,867

S&P 500 was up 9 points (+0.5%) at 1,959

Nasdaq Composite Index was up 29 points (+0.7%) at 4,379

GLOBAL SENTIMENT

FTSE 100 was down 0.79%

Nikkei 225 was down 0.71%

Hang Seng Index was down 0.06%

Shanghai China Composite Index was down 0.41%

UPSIDE MOVERS

(+) AERI Successful results of its Phase 2b trial for once-daily, quadruple-action Roclatan

(+) MDCI To be bought by Owens & Minor for $13.80/share in cash

(+) ADPT Trading higher after 4.9 million share IPO at $22

(+) PVA Soros calls for sale of company, raises stake to 9.53%

DOWNSIDE MOVERS

(-) IMGN Morgan Stanley initiates with Underweight rating, $10 PT

(-) GRUB Amazon ( AMZN ) launches take-out rival under Amazon Local

(-) VMI Lowered FY14 outlook and Q2 EPS guidance