U.S. stocks jumped Wednesday, pulling benchmark indexes into positive terrain for the week, as a revision in economic growth calmed concern about U.S. monetary policy. Gross domestic product expanded 1.8% from January through March, down from an earlier estimate of 2.4%, the Commerce Department reported. "The downward revision makes some investors feel that perhaps tapering isn't as imminent as it appeared last week," said Stuart Freeman, chief equity strategist at Wells Fargo Advisors, referring to market concerns that the Federal Reserve might scale back its $85 billion in monthly bond purchases sooner rather than later. "That's speculation, because if the Fed is seeing more growth ahead, it may not have been a surprise to them that it was a downward revision," added Freeman. Speaking on Bloomberg television Wednesday, Federal Reserve Bank of Richmond President Jeffrey Lacker called the 1.8% GDP figure consistent with his outlook, and said the central bank was not anywhere near to making cuts in its balance sheet. Making its 14th triple-digit move out of 18 sessions in June, the Dow Jones Industrial Average DJIA +1.02% jumped as much as 178 points, and finished with a gain of 149.83 points, or 1%, at 14,910.14, with Boeing Co. BA +2.11% pacing gains that included all but three of the Dow's 30 components. The S&P 500 SPX +0.96% climbed 15.23 points, or 1%, to 1,603.26, with health care and utilities leading the gains among its 10 major industry groups. The gains come on "continued momentum from markets, having been really battered over the last five days or so," said Mark Luschini, chief investment strategist at Janney Montgomery Scott. The S&P 500 remains roughly 70 points below "where we peaked in late May," said Luschini of the 1,669 close on May 21, a day before Fed Chairman Ben Bernanke said the Fed could begin reducing its monetary easing later this year so long as the economy is strong enough. The Nasdaq Composite COMP +0.85% added 28.34 points, or 0.9%, to 3,376.22. For every stock falling, more than three gained on the New York Stock Exchange, where nearly 745 million shares traded. Composite volume approached 3.5 billion. Gold futures for August delivery GCQ3 +0.49% fell $45.20, or 3.6%, to $1,229.80 an ounce on the New York Mercantile Exchange. Gold offers "no cash flow and no dividends," said Freeman, who added that a rising dollar and interest rates also present a bearish case for the metal. "On Feb. 15, we advocated stepping out of gold at $1,600 an ounce," said Luschini, who argued that the commodity now has a cost to carry, given there are positive real interest rates being offered in the bond market. On Wednesday, Treasury prices tallied their first gain in eight days, with the 10-year Treasury note yield 10_YEAR -0.51% used in determining rates on mortgages and other consumer loans at 2.542%. The price of oil CLQ3 +0.57% edged up to $95.50 a barrel, and the U.S. dollar DXY -0.08% rose for a sixth session against other currencies, including the yen USDJPY +0.36% . Rearview mirrors U.S. stock futures maintained modest gains ahead of Wednesday's open after data had the U.S. economy growing less than previously thought in the first quarter, as consumers spent less on services. The GDP report, while disappointing, "fits the inertia we've had economically, but it's rear-view mirror, as opposed to recent data, the Fed statement, and what lies ahead," said Luschini at Janney Montgomery Scott. Bernanke said last week that the Fed could start slowing asset purchases later this year if the economy improves further. "Especially in light of the FOMC, everything is about what is to come as opposed to revisions to three-month-old data," said Luschini. Equities mostly climbed in Europe and Asia as China's money-market rates declined in the wake of a statement from the People's Bank of China that it had moved to stabilize interbank lending rates. Global markets have settled down in part because of "calming comments from the People's Bank of China regarding its intention to stabilize a fragile credit situation among small banks in that country," Fred Dickson, chief investment strategist at Davidson Companies, noted in emailed research.
