Dow Jones closes at record high

The Dow Jones industrial average closed at an all-time high as the good narrowly outweighed the bad for the stock market.

Dow Jones closes at record high

The Dow Jones industrial average closed at an all-time high as the good narrowly outweighed the bad for the stock market.

After investors took in some solid US company earnings, the latest move from the Federal Reserve and a report of unexpectedly weak economic growth in the first quarter, the stock market managed its third straight day of gains.

The Dow Jones industrial average rose 45.47 points, or 0.3%, to 16,580.84, four points above its previous record set on December 31. It was the first day the index closed in positive territory for the year.

The Standard & Poor’s 500 index rose 5.62 points, or 0.3%, to 1,883.95. The Nasdaq composite rose 11.01 points, or 0.3%, to 4,114.56.

Stocks started the day lower after the commerce department said US growth slowed to a barely discernible 0.1% annual rate in the January-March quarter, less than 1.1% forecast by economists, according to FactSet. Winter storms chilled activity.

The market’s reaction was muted because most investors expect the slowdown to be temporary and growth to rebound with warmer temperatures.

“Most people, including us, expected March to have been the strongest month of the first quarter” and that growth will continue to pick up, said Sean Lynch, global investment strategist for Wells Fargo Private Bank.

“That’s an OK environment for the market.”

Some solid earnings reports and corporate deal news helped offset the weak economic report, and by midday stocks had eked out small gains.

Pepco Holdings surged 3.97 dollars, or 17.4%, to $26.76 after it agreed to be acquired by nuclear power company Exelon for 6.83 billion dollars, creating a large electric and gas utility in the mid-Atlantic region.

Exelon will pay an 18% premium to the company’s $23.10 closing price on Tuesday.

Sealed Air rose 1.72 dollars, or 5.3%, to $34.31 after the food packaging company’s earnings easily beat Wall Street’s expectations.

The company also said it was on track to post full-year earnings at the upper end of the range of its forecast.

More than 60% of S&P 500 companies have reported first-quarter earnings. Analysts currently expect earnings to grow by 1.7% in the period, according to S&P Capital IQ data.

That compares with growth of almost 8% in the fourth quarter and 5.2% in the same period a year ago.

Stocks climbed higher in afternoon trading after the Federal Reserve’s statement following its April policy meeting was in line with investor’s expectations.

The Fed said it would reduce its monthly bond purchases by another $10bn to $45bn.

The stimulus is intended to hold down long-term interest rates and support the mortgage market.

The Fed also reaffirmed its plan to keep short-term interest rates low to support the economy “for a considerable time” after its bond purchases end, likely late this year.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.65% from 2.70% on Tuesday. The yield on the note has fallen from 3% at the start of the year.

As bond yields remain close to historical lows, stocks will likely remain attractive to investors, said David Kelly, Chief Global Strategist at JPMorgan funds.

“What else are you supposed to do with your money?” Mr Kelly said. “For lack of something better to do with it, money is going to move back into equities.”

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