What a Week: Yippee for GDP but Don't Uncork the Bubbly Yet

SAN FRANCISCO -- Rumors of the economy's demise appear to have been greatly exaggerated, judging by this week's economic data. Friday's stronger-than-expected GDP report supported a growing sense that the economy is on the rebound. Such sentiment aided stocks, as investors surmised good economic news is positive for equities -- even if it potentially makes future Federal Reserve rate cuts less aggressive.

The Dow Jones Industrial Average rose 2.2% for the week while the S&P 500 gained 0.8%. After sustaining steep losses Monday and smaller dips Tuesday and Thursday, the Nasdaq Composite finished the week off 4% despite rallying 2% on Friday.

The Commerce Department reported first-quarter Gross Domestic Product rose 2%, well in excess of the 1.1% forecast by economists. Additionally, inventories fell $7.1 billion in the quarter, the first drop since 1991's fourth quarter. The GDP data followed some other positive economic indicators this week, notably Wednesday's stronger-than-expected reports on housing and durable goods. ...