Market Hustle: Stocks Hold Gains After Beige Book Report, Dovish Yellen Remarks
NEW YORK (TheStreet) -- Major U.S. stock markets were rising Wednesday after better-than-expected Chinese growth while investors digested dovish remarks from Federal Reserve Chairwoman Janet Yellen and an improved Beige Book report. Domestic economic data was mixed.
Companies such as Google (GOOG) are due to report earnings later Wednesday. On Tuesday after the close, Yahoo! (YHOO) said first-quarter earnings dropped to 29 cents a share from 35 cents a share a year earlier. Yahoo! shares were gaining nearly 6% Wednesday afternoon as it helped bolster the Nasdaq.
The Dow Jones Industrial Average was rising 0.72% to 16,379.57 while the S&P 500 was up 0.67% to 1,855.28 . The Nasdaq was gaining 0.75% to 4,064.57.
- China's gross domestic product growth fell to its slowest level in 18 months at 7.4% during the first quarter due to weaker momentum in investment and consumption. Yet the result was slightly above expectations for a 7.3% reading, leading to uncertainty about whether China will take further measures to boost growth. GDP was 7.7% in the fourth quarter and growth lags the target of 7.5% set by Chinese authorities for 2014.
- Ukraine military tensions continued as vehicles flying Russian flags with armed fighters moved into eastern Ukrainian cities early on Wednesday. The Ukrainian army is pushing to clear pro-Russian separatists out of 10 cities in the eastern region of Donetsk.
- U.S. home construction grew less than forecast in March, with housing starts rising 2.8% to a 946,000 annualized rate after a 920,000 gain for February. Expectations were for an increase to 970,000. Permits for future projects fell.
- U.S. industrial production rose 0.7% in March after an upwardly-revised increase in February of 1.2%. Economists, on average, were expecting in 0.5% gain for March.
- One of the main points Janet Yellen made during a speech at the Economic Club of New York Wednesday was, "the larger the shortfall of employment or inflation from their respective objectives, and the slower the projected progress toward those objectives, the longer the current target range for the federal funds rate is likely to be maintained."
- The latest Beige Book report said that anecdotal information from the 12 Federal Reserve Districts suggest economic activity increased in most regions of the country since the previous report, with consumer spending rising in most districts as weather conditions improved. The report overall was not expected to have an impact on Fed policy.
- In international markets, the Hang Seng closed 0.11% higher while the Nikkei jumped 3.01%. Germany's DAX was rising 1.57% while the FTSE was 0.65% higher.
- European Union consumer prices rose at the slowest pace for 4.5 years in the year to March, underlying the problem of falling inflation across the region. Consumer prices in the 18 nations that share the euro were 0.9% higher in March than February, and 0.5% higher than a year earlier.
- The U.K. jobless rate fell to 6.9% in the three months to February, beating expectations of a 7.1% result.
- Companies seeing price action Wednesday include Google, Bank of America (BAC), International Business Machines (IBM) and American Express (AXP).
Google is slated to post earnings of $6.35 a share in the first quarter. Shares were up 1.72% ahead of the earnings call.
- Bank of America shares were falling 2% to $16.06 after the bank posted a first-quarter loss of 5 cents a share. The bank recorded a $6 billion litigation expense in the quarter.
- IBM is forecast to post earnings of $2.54 a share while American Express is likely to report first-quarter earnings of $1.30 a share. American Express was gaining 1.42%; IBM was flat to lower.
- After Tuesday's closing, Intel (INTC) announced earnings of 38 cents a share against 40 cents a share a year ago.
- Other stock movers Wednesday include Time Warner Cable (TWC) and Yelp (YELP), following analyst upgrades. Time Warner Cable was up 0.82% after being raised to"outperform" from "market perform" at Wells Fargo. Yelp was popping 2.74% after Citigroup boosted the stock to "buy" from "neutral."
- Markets closed higher Tuesday amid strong earnings from companies such as Coca-Cola (KO) and Johnson & Johnson (JNJ).
-- By Andrea Tse and Jane Searle in New York
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