By Alexandra Scaggs
U.S. stocks advanced broadly on Wednesday, as rising hopes of
economic stimulus from Asia helped boost investor confidence.
The Dow Jones Industrial Average gained 88 points, or 0.5%, to
16351. The S&P 500 index advanced seven points, or 0.4%, to
1850 and the Nasdaq Composite Index climbed 16 points, or 0.4%, to
4050.
On Tuesday, stocks ended a roller-coaster session broadly
higher. The Dow closed up 89 points to post the best two-day point
gain since March 18.
The Nasdaq Composite was bolstered by strong gains in
social-media and biotechnology stocks. The Nasdaq Biotechnology
Index rose 0.9%. The Nasdaq has been roiled in recent sessions as
investors fled social-media and biotech stocks, and the biotech
index was down 4.1% for the year as of Tuesday's close.
Helping drive the early gains was a report showing that China's
gross domestic product grew 7.4% in the first quarter, the slowest
rate in 18 months, but above economists' forecasts of 7.3%. Traders
said the slowing pace of growth raised investor hopes of more
stimulus from the Chinese government.
"The Chinese data certainly corroborates the idea that the
economy is slowing, but at the same time officials have become
concerned enough" that more stimulus could be a possibility, said
Dan Greenhaus, chief market strategist at New York brokerage firm
BTIG. And that is a positive factor for stocks globally, he
said.
Stocks in Europe and Asia gained on the news, with the Stoxx
Europe 600 advancing 1% as the Chinese data offset mixed data from
Europe.
In Asia, Japan's Nikkei Stock Average shot up 3%, helped by
China's GDP data, and after Bank of Japan Governor Haruhiko Kuroda
said he would closely monitor stock prices and that inflation was
on a steady track toward the 2.0% target. China's Shanghai
Composite gained 0.2%.
Stock futures pared some of their gains premarket after U.S.
housing data missed forecasts. New residential construction for
March rose 2.8% to a seasonally adjusted annualized rate of
946,000, falling well below forecasts of a rise of 6.4% to a
seasonally adjusted annualized rate 965,000. Building permits fell
2.4% to 990,000, versus forecasts of 1.01 million.
Industrial production rose 0.7% in March, while a rise of 0.4%
was forecast. Capacity utilization rose by more than expected as
well.
At 12:25 p.m., Federal Reserve Chairwoman Janet Yellen is giving
a speech on monetary policy and the economic recovery at the
Economic Club of New York. The Fed's "beige book" report, a read on
the U.S. economy from anecdotes gathered by the central bank's 12
districts, is due later in the afternoon.
The yield on the 10-year Treasury note rose to 2.648% from
2.628% late Tuesday.
The data from China helped offset mixed corporate earnings
reports. With 47 companies reporting, the S&P 500 is on pace to
report that first-quarter earnings declined 1.9% from the previous
year, according to FactSet, and that sales rose 2.2%.
Dow component Intel rose 0.8% after reporting late Tuesday
first-quarter earnings that topped analyst estimates, while revenue
was in line with its forecast and PC sales continued to
decline.
Yahoo surged 7% after first-quarter results exceeded
expectations, and the company provided an upbeat revenue outlook
for the current quarter.
Bank of America slipped 2.9% after the banking giant reported it
swung to a first-quarter loss as a result of previously-disclosed
litigation expenses, while revenue fell slightly less than
expected.
Gold futures gained 0.3% to $1,304.20 a troy ounce, after
falling 2% Tuesday to mark the biggest one-day percentage loss
since Dec. 19.
Crude-oil futures added 0.8% to $104.63 a barrel. The dollar
rose against the yen, but lost some ground against the euro.
In other corporate news, Google, which is due to report results
after the close, rose 1.9%.
Twitter slipped 3.8%. The stock shot up 11% Tuesday, the biggest
one-day gain since the microblogging site went public in November.
Tuesday's rally came one day after some of the company's earliest
and biggest backers said they didn't plan to sell shares when rules
barring them from doing so expire next month.
Twitter had been one of the hardest-hit of the previous
highfliers, as the stock was down 37% on the year through Friday,
after ending last year 145% above its $26 initial public offering
price.
Write to Alexandra Scaggs at alexandra.scaggs@wsj.com