US shares surged broadly on Wednesday, as increasing hopes of economic stimulus from Asia bolstered investor sentiment.
The Dow Jones Industrial Average added 125 points or 0.8% to reach 16387. All the 10 sectors in the S&P 500 advanced, with the index hitting 1858 after increasing 15 points or 0.8%.
The Nasdaq Composite Index increased 44 points or 1.1% to hit 4079, buoyed by a surge in social-media and biotechnology stocks. The Nasdaq Biotechnology gauge added 2.4%.
As Wall Street Journal reports, Tuesday’s roller-coaster trading session ended with stocks higher. The Dow saw its best two-day point gain as it closed at 89 points.
Growth of China’s gross domestic product in the first quarter hit 7.4%, helping improve gains, despite being the lowest in 18 months. Economists had forecasted a GDP growth of 7.3%. Traders expressed optimism that the slow rate of growth would move the Chinese government into aiding the economy.
Yahoo surged 6.2% after an increase in sales at Alibaba Group Holding Ltd, where the website has interest. Johnson Controls Inc. climbed 1.5% after the largest maker of vehicle parts in the US agreed to acquire Air Distribution Technologies for $1.6 billion.
However, according to Bloomberg, stocks of Bank of America Corp lost 2.5% after posting a loss for the first quarter. Chipmaker Linear Technology Corp shrank 4.7% on unimpressive reports.
Economic data released in a report today by the Commerce Department showed that improvements in manufacturing are helping the US economy rebound from effects of bad weather as homebuilding showed signs of decline.
Industrial output surged 0.7% in March.
The report showed that the construction of new homes recovered less than anticipated in March, rising 2.8% on a seasonally adjusted yearly rate of 946,000. The rebound was expected to stand at 6.4% to a seasonally adjusted yearly rate of 965,000. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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