NEW YORK – Wall Street managed a modest advance in light pre-holiday trading Wednesday, boosted by a gross domestic product report that showed the economy expanding at a faster pace than previously thought.
Stocks, which have made gains this week on hopes the economy has slowed enough to ward off further interest rate hikes, meandered and then turned higher during the session on thin volume ahead of Labor Day. The Commerce Department reported the economy as measured by GDP grew at a 2.9 percent annual rate in the second quarter, better than first estimated last month though still a decline from the first quarter.
Investors have been scrutinizing economic reports to determine whether the economy is slowing too much, a trend that could hurt both consumer and corporate spending. So a slight improvement in the GDP was a welcome sign for investors, who are now look to a job report on Friday for further direction.
“The GDP is exactly what we wanted to see, and the economy continues to expand and it limits inflation worries,” said Ryan Larson, senior equity trader at Voyageur Asset Management, a subsidiary of RBC Dain Rauscher. “GDP numbers are still a lagging indicator, and the market pulled back because investors are still looking for concrete evidence the Fed is in pause mode.”
The markets got support for much of the session from oil prices that have dropped to three-month lows this week, although a barrel of crude eventually closed up 32 cents at $70.03 Wednesday on the New York Mercantile Exchange. Concerns about a strike in Nigeria wiped out an earlier decline that followed news of an increase in U.S. energy stockpiles.
The Dow Jones industrial average rose 12.97, or 0.11 percent, to 11,382.91.
Broader stock indicators showed mixed results. The Standard & Poor’s 500 index was down 0.01, or nearly unchanged at less than 0.01 percent as it closed at 1,304.27. The Nasdaq composite index rose 13.43, or 0.62 percent, to 2,185.73.
Advancing issues were ahead of decliners by about 7 to 4 on the New York Stock Exchange where preliminary consolidated volume came to 2.08 billion shares, compared with 2.23 billion traded Tuesday.
Bonds continued their advance, with the yield on the benchmark 10-year Treasury note at 4.76 percent, down from Tuesday’s 4.79 percent. The dollar rose against other major currencies, while gold prices rose.
The Russell 2000 index of smaller companies rose 5.73, or 0.80 percent, to 720.58.
Overseas, Japan’s Nikkei stock average closed lower by 0.12 percent. At the close, Britain’s FTSE 100 rose 0.70 percent, Germany’s DAX index added 0.35 percent, and France’s CAC-40 was up 0.44 percent.