FOX Business: Capitalism Lives Here
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U.S. equity markets charged higher on Wednesday after data from China and dovish commentary from Janet Yellen boosted traders' sentiment.
The Dow Jones Industrial Average climbed 162 points, or 1%, to 16425, the S&P 500 advanced 19.3 points, or 1.1%, to 1862 and the Nasdaq Composite rose 52.1 points, or 1.3%, to 4086.
The markets have been recovering after Wall Street's worst week since 2012. The optimism extended into Wednesday on strong data from China.
The world's second-biggest economy grew at an annual pace of 7.4% in the first quarter, narrowly beating estimates of 7.3%. The strong data helped alleviate concerns that China could be in for a so-called hard landing, in which growth would drastically slow down, which would hit many other economies.
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Still, many analysts struck a cautious tone.
"We maintain our view that GDP growth is on a downtrend and we continue to expect it to slow to 7.1% in (the second quarter)," analysts at Japan-based Nomura wrote in a note to clients.
"We believe the government will not announce any new easing measures in April as it waits to see how the economy responds to the current fiscal easing measures."
Meanwhile, the Commerce Department reports starts of new home construction rose 2.8% in March to an annualized rate of 946,000, short of expectations for an increase to 973,000. Permits fell 2.4% in the same month to an annualized rate of 990,000, also below Wall Street views of a drop to 1.01 million. New home construction is seen having rebounded in March after weather weighed the market down during the first two months of the year.
Meanwhile, Federal Reserve chief Janet Yellen said the central bank sees the unemployment rate falling back to its "normal" level in about two years.
In prepared remarks to The Economic Club of New York, the newly-minted head of the mighty central bank said she will look at a range of indicators in deciding when to raise short-term rates from historic lows. Those gauges range from wage growth, to the labor force participation rate, to the share of workers who are working part time for economic reasons.
Economic activity is bouncing back from winter doldrums across most of the Federal Reserve’s 12 districts, according to the central bank’s anecdotal Beige Book report. At the same time, labor market conditions were seen as ‘mixed but generally positive,’ while price pressure remained subdued.
In corporate news, Bank of America (BAC) swung to a first-quarter loss on a $6 billion litigation expense as the No. 2 U.S. bank faces a series of lawsuits from regulators. Yahoo (YHOO) and Intel (INTC) shares climbed amid stronger-than-expected quarterly results.
Elsewhere, U.S. crude oil futures jumped by 96 cents, or 0.93%, to $104.71 a barrel. Wholesale New York Harbor gasoline rose 0.1% to $3.045 a gallon. Gold rose $1.70, or 0.13%, to $1,302 a troy ounce.