Stocks edge up after US growth revised higherNEW YORK (AP) — Slightly better economic growth and stronger housing sales nudged the stock market higher Wednesday.
By: Matthew Craft, AP Business Writer, The Jamestown Sun
NEW YORK (AP) — Slightly better economic growth and stronger housing sales nudged the stock market higher Wednesday.
Just before 2 p.m. EDT, the Dow Jones industrial average was up 40 points at 14,163.
Major indexes opened slightly higher after the government said the economy grew at a quicker pace in the spring than first thought.
The U.S. economy expanded at a 1.7 percent annual rate from April through June thanks to rising consumer spending and exports. That's an improvement from the initial estimate of 1.5 percent, but not enough to put a dent in the unemployment rate.
The National Association of Realtors said its index of sales for previously owned homes increased 2.4 percent in July, reaching its highest level since April 2010, the last month buyers could qualify for a federal tax credit.
"It's a mixed message overall," said JJ Kinahan, chief derivatives strategist at TD Ameritrade. "We all know we need 2 percent (economic) growth. And you can't continue to improve on housing if the unemployment picture doesn't improve. At some point, the numbers have to match."
In other trading, the Standard & Poor's 500 index added four points to 1,414, while the Nasdaq composite index gained 10 to 3,087.
Crude oil dipped 96 cents to $95.37. Hurricane Isaac made landfall Tuesday night, but its heavy winds and rain aren't expected to cause extensive damage to oil production and refinery operations in the Gulf of Mexico.
Markets have slipped into a late-summer lull. Indexes have barely budged amid some of thinnest trading days this year. For the week, the S&P 500 index is down one point.
Just 7.7 billion shares were traded on the New York Stock Exchange over the previous three days, the slowest three-day stretch since December 2011, according to FactSet data. One measure of stock-market volatility, the Vix, recently sank to a five-year low.
Kinahan said the market's apparent lack of direction makes sense, especially ahead of the Labor Day weekend and a highly anticipated speech by Federal Reserve Chairman Ben Bernanke on Friday.
"There's no incentive to take a big trading position," he said. "Many people I know plan on taking a three-day weekend or are just coming in for the speech to see if (Bernanke) says anything interesting or market-moving. If not, they're outta there."
Among companies making news:
— WellPoint, the second-largest health insurance company in the United States, jumped $4.58, or 8 percent, to $61.97 after its CEO resigned. Investors had been frustrated with Angela Braly because of disappointing results.
— H.J. Heinz posted a 14 percent jump in quarterly net income, driven by higher prices and emerging-market sales, but revenue fell and missed Wall Street expectations. Heinz stock dropped $1.33, or 2.4 percent, to $56.08.
— The clothing store chain Jos. A. Bank posted stronger sales and revenue than Wall Street expected, and its stock soared $6.61, or 16 percent, to $48.24.
— Sealed Air Corp., a food packaging company, jumped 8.9 percent, the S&P 500's biggest gain. A former Dow Chemical executive will take over when its current CEO retires. The company's stock gained $1.16 to $14.16.