Investors looked past anemic U.S. economic growth in the first quarter and sided with the Federal Reserve’s rosier outlook, pushing the Dow Jones Industrial Average to a record high close today.
The Dow gained 0.3 percent to close at 16,580.84 — which counts as a record for the close, although the index has tiptoed higher in intraday trading. Retail stocks also gained. The S&P 500 Retailing Industry Group advanced 0.1 percent to 858.45.
Among the day’s winners were Iconix Brand Group Inc., which rose 6.7 percent to $42.50 after the company posted higher first quarter sales and profits, and Columbia Sportswear Co., which increased 4.9 percent to $85.98 after the firm unveiled a deal to buy Prana Living and said its first quarter sales and profits topped expectations. Also, Under Armour Inc.’s stock gained 3.7 percent to $48.89.
On the tech front, Facebook Inc.’ stock gained 2.8 percent to $59.78, but Twitter Inc. fell 8.6 percent to $38.97 amid worries that growth in the company’s active user base is starting to wane.
The Commerce Department said U.S. gross domestic product just barely grew in the first quarter, inching up 0.1 percent — a far cry from the 1.1 percent gain economists projected. But the Federal Reserve noted that “growth in economic activity has picked up recently, after having slowed sharply during the winter in part because of adverse weather conditions.”
The Fed felt strongly enough about the direction of the economy to reduce its bond purchase to $45 billion a month, a cut of $10 billion monthly. The program was set up to help bolster growth by pumping more money into the economy.
In Europe, the FTSE MIB in Milan closed down 0.9 percent to 21,783.38, while the CAC 40 in Paris ended off 0.2 percent to 4,487.39. But the FTSE 100 in London and the DAX in Frankfurt both managed to edge up 0.2 percent, to 6,780.03 and 9,603.23 respectively.
The decliners included Koovs, which lost 4.8 percent to 1.59 pounds; Gemfields, 1.9 percent to 0.38 pounds; Ted Baker, 1.5 percent to 18.49 pounds and Hennes & Mauritz, 3.5 percent to 264.80 Swedish krone.
But a number of stocks in the sector made strong gains, including Aeffe, which soared 16.5 percent to 1.01 euros; Asos.com, 4.3 percent to 42.76 pounds; French Connection, 8.7 percent to 0.80 pounds and Mulberry, 7.3 percent to 7.25 pounds.
The pound traded for $1.68 against the U.S. dollar, while the euro changed hands for $1.38 and the Swedish krona went for 15 cents.