Wednesday, June 25, 2014 3:33 pm
NEW YORK – Wall Street stocks moved higher in early trade Wednesday despite a US Commerce Department report that showed first-quarter economic activity contracted much more than previously thought.
About 30 minutes into trade, the Dow Jones Industrial Average gained 29.19 points (0.17 percent) at 16,847.32.
The broad-based S&P 500 tacked on 3.10 (0.16 percent) to 1,953.08, while the tech-rich Nasdaq Composite Index rose 5.20 (0.12 percent) to 4,355.56.
US gross domestic product fell at a 2.9 percent annual pace in the first three months of 2014, much worse than the previous estimate of 1.0 percent and the sharpest decline in five years.
The Commerce Department said the drop reflected weaker growth in consumer spending, a larger increase in exports and higher imports than previous estimates.
Although GDP data is backward-looking, the report suggests full-year forecasts “will have to come down even further — and that’s a buzz kill,” said Briefing.com analyst Patrick O’Hare.
Oil refiners slumped after the US issued permits to two companies to export unrefined oil for the first time in four decades, potentially threatening domestic refining margins. Marathon Petroleum (-5.5 percent), Phillips 66 (-3.3 percent) and Valero Energy (-7.0 percent) all fell.
General Mills fell 3.2 percent as fiscal fourth-quarter earnings came in at 65 cents per share, far below the 72 cents projected by analysts. General Mills said promotional spending in developed markets was “less effective than we planned and input cost inflation was a bit above our forecast.”
Agrotech leader Monsanto jumped 5.3 percent as third-quarter profits of 1.62 per share bested expectations by six cents. The company lifted its long-term profit targets and announced a $10 billion share repurchase plan.
Bookseller Barnes & Noble jumped 9.9 percent following an announcement it plans to spin off its Nook division, which produces tablets and digital books.
Bond prices rose. The yield on the 10-year US Treasury dropped to 2.54 percent from 2.59 percent Tuesday, while the 30-year declined to 3.37 percent from 3.41 percent. Bond prices and yields move inversely.