By Wallace Witkowski and Victor Reklaitis, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks closed higher Wednesday,
recovering from a weak revision of first-quarter economic
performance, as media stocks got a lift from a Supreme Court ruling
and refinery stocks dropped on a weakening of an oil export
ban.
The S&P 500 Index (SPX) rose 9.55 points, or 0.5%, to end at
1,959.53, while the Dow Jones Industrial Average (DJI) gained 49.38
points, or 0.3%, to finish at 16,867.51.
The S&P 500 and Dow both snapped two-day skids, but remain
down for the week after closing at record levels on Friday.
The Nasdaq Composite Index (RIXF) climbed 29.40 points, or 0.7%,
to close at 4,379.76, as Google Inc. (GOOG) kicked off its annual
I/O developers conference in San Francisco. The tech-heavy index
scored its highest close since April 2000.
Orders for durable goods fell 1% in May, the Commerce Department
said Wednesday. That was below the 0.5% expected by economists
surveyed by MarketWatch.
In addition, the U.S. economy shrank by a 2.9% annual pace in
the first quarter instead of 1% as previously reported, marking the
biggest decline since early 2009 when the Great Recession was
winding down. The economy has strengthened since the first quarter,
when it was hurt by an unusually harsh winter, with growth
projected to rise roughly 3% in the second quarter, which ends
Monday.
Investors knew the GDP report would "stink, but not this much,"
said Naeem Aslam, chief market analyst at Ava Trade, in emailed
comments. But he said he expects "payback" in the current quarter,
meaning "a strong reading."
"The initial reaction to the GDP report was exactly that, a
kneejerk reaction," said Dan Greenhaus, BTIG, in emailed
comments.
Greenhaus pointed out that core durable-goods data, excluding
defense spending, was actually good and that even the less closely
followed Markit PMI figure was better than expected, indicating the
economy is in much better shape than the revised first-quarter GDP
data would suggest.
Peter Cardillo, chief market economist at Rockwell Global
Capital, said Wednesday's two economic reports reinforce the notion
that the Federal Reserve won't raise interests rates sooner than
expected, and he sees stocks staying in a narrow trading range for
the summer.
"For now, I just think the market holds its own here," Cardillo
told MarketWatch. "I don't see an interruption of the longer-term
bull market, but rather just a pause."
That view of a narrow trading range for the summer was backed by
Terry Sandven, chief equity strategist at U.S. Bank, in a recent
note.
"Among near-term catalysts, the June employment report scheduled
for release on July 3 and second quarter earnings results set
largely to begin in the middle of July should set the tone for
performance throughout the third quarter and perhaps beyond,"
Sandven said.
Aereo ruling drives media stocks; refiners hurt by export ban
development
Among individual stocks, Valero Energy Corp.(VLO) closed down
8.3%, faring worst among S&P 500 names, after the Wall Street
Journal reported late Tuesday the Obama administration was
lightening the 40-year ban on crude oil exports. Similarly,
Marathon Petroleum Corp. (MPC) shares fell 6.3%, Phillips 66 (PSX)
shares dropped 4.2%, and Tesoro Corp. (TSO) shares also declined
4.2%.
Shares of Schlumberger Ltd. (SLB) closed up 6.4%, leading the
S&P 500, after the oil-services company announced a memorandum
of understanding to discuss the sale and lease of oilfield
equipment in Afghanistan to Bayat Energy.
CBS Corp. (CBS) was the second-best performer among S&P 500,
and Gannett Co. (GCI) was a strong performer. CBS shares rose 6.2%,
and Gannett advanced 5.1% after the Supreme Court ruled against
Internet TV startup Aereo.
(Read more in our Movers & Shakers column
http://www.marketwatch.com/story/monsanto-barnes-noble-jump-general-mills-down-2014-06-25.)
In other markets, Japan's Nikkei Average fell 0.7%, along with
other Asian stock markets. In Europe, the Stoxx Europe 600 pulled
back.
U.S. benchmark crude-oil futures (CLQ4) rose, and gold futures
(GCQ4) weakened.
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