U.S. stocks rose, following yesterday’s declines, as data showed the economy rebounded more than forecast in the second quarter and Twitter Inc. (NYSE:TWTR) rallied before a Federal Reserve policy decision.
Twitter soared 23 percent as results beat estimates and the company boosted its annual sales projection. Amgen Inc. (NASDAQ:AMGN) rallied 5.5 percent after raising its profit estimate and announcing job cuts. Hess Corp. (NYSE:HES) gained 4.3 percent as the company said it will form a master limited partnership for one of its units.
The Standard & Poor’s 500 Index climbed 0.4 percent to 1,977 at 9:47 a.m. in New York. The Dow Jones Industrial Average rose 41.52 points, or 0.3 percent, to 16,953.63. The Nasdaq 100 Index increased 0.6 percent. Trading in S&P 500 stocks was in line with the 30-day average during this time of day.
“It’s a strong showing that the second quarter bounced back very well after the lackluster first quarter,” Joe Bell, senior equity analyst at Cincinnati-based Schaeffer’s Investment Research Inc., said in a phone interview. “This week has a ton of different data. But the big thing is obviously the Fed.”
Gains in consumer spending and business investment helped the U.S. economy rebound in the second quarter following a slump in the prior three months that was smaller than previously estimated.
Gross domestic product rose at a 4 percent annualized rate after shrinking 2.1 percent from January through March, Commerce Department figures showed today in Washington. The median forecast of 80 economists surveyed by Bloomberg called for a 3 percent advance.
Consumer spending, the largest part of the economy, rose 2.5 percent, reflecting the biggest gain in purchases of durable goods such as autos in almost five years.
The S&P 500 fell 0.5 percent yesterday as President Barack Obama announced new sanctions against Russia. The equity gauge has advanced 7 percent this year as the U.S. economy shows signs of recovering from the contraction in the first quarter.
The Fed will reduce its monthly purchases for the sixth time to $25 billion from $35 billion after a two-day policy meeting ending today, according to economists surveyed by Bloomberg News. The policy-making committee last month repeated it’s likely to “reduce the pace of asset purchases in further measured steps” and that it expects interest rates to stay low for a “considerable time” after the bond-buying ends.