It was a rough day in the economic world; the MNI Chicago Report business barometer showed that business activity in the U.S. expanded at a slower pace in March, dropping to 56.5 from a 56.8 reading in February, jobless claims spiked for the second consecutive week, U.S. gross domestic product showed sluggish growth, and Cyprus has caused concerns in Europe. Yet with the S&P racing upward, U.S. equity markets ended the day in the green.
At the close: DJIA: +0.36%, S&P 500: +0.41%, NASDAQ: +0.34%.
Here are three stories that helped shape the markets on Wednesday:
1) Time to dust off your rally caps and pop the champagne. After more than five years of waiting, the S&P 500 has finally managed to break its all-time nominal closing high set in October 2007. On the final trading day of the first quarter, the S&P 500 (NYSEARCA:SPY) gained more than 4 points to hit 1,568, just above its closing high of 1,565.15 made nearly 66 months ago. The new record comes about three weeks after the Dow Jones Industrial Average (NYSEARCA:DIA) broke its previous high.
Interestingly, the move comes as banks in Cyprus reopen for the first time in two weeks. Turmoil in the insolvent country caused an increase in volatility due to officials deciding to confiscate bank deposits to satisfy requirements for a bailout from international leaders… (Read more.)
2) While Europe finds itself still shrouded in the dark veil of the debt crisis, the U.S. is looking at decidedly brighter skies, as the economy continues its positive trajectory. While growth remained slow in the final months of 2012, stronger business spending helped advance the nation’s gross domestic product at a 0.4 percent annual rate between October and December, the Department of Commerce reported on Thursday.
Though Washington has been locked in a bitter battle over budgetary issues, among other closely watched topics of controversy, companies are still looking to expand, tired of waiting on an indecisive Congress. But like the government, businesses are being cautious — last quarter’s GDP gain is the second-weakest reading since the current recovery began in the second half of 2009. Still, the economy has now grown for 14 consecutive quarters, and GDP advanced 2.2 percent in 2012 alone… (Read more.)
3) Despite recent hiccups in the weekly jobless claims and a slowly improving economy, continued support from the central bank to curb interest rates and strengthen hiring has been paying off, overall. Jobless claims have been trending downward and offer cautious optimism for future hiring patterns.
However, this past week’s numbers revealed an increase of 16,000 claims, that points to slowing of economic growth that gained steam earlier in the year, even though numbers are lower than this time last year. For the week which ended on March 23, the advance figure for seasonally adjusted initial claims was 357,000, an increase of 16,000 from the previous week’s revised figure of 341,000… (Read more.)
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