- Fourth quarter business investment revised higher
- Treasury yields move higher
Dow Jones Industrials: 0.50%
Nasdaq Composite: 0.40%
S&P 500: 0.52%
The main US stock benchmarks moved higher following a stronger than might at first appear bag of economic data.
US gross domestic product (GDP) rose at a revised annualised pace of 2.4%, compared to 3.2% in the third quarter. Economists had pencilled in growth of 2.5%.
However, Capital Economics pointed out that "the good news is that business investment increased by 7.3%, revised up from the initial estimate of a 3.8% gain. That gain helped to offset an 8.7% decline in residential investment, which was hit by the drop back in existing home sales that has reduced brokers' commissions."
The data came a day after Federal Reserve Chair Janet Yellen delivered a dovish testimony to the Senate. While she noted the recent batch of weak economic releases, Yellen said she believes it could be down to the harsh winter weather.
"What we [...] will be doing in the weeks ahead is to try to get a firmer handle on exactly how much of that set of soft data can be explained by weather and what portion, if any, are due to a softer outlook," the central banker said.
She also said the Fed was likely to continue winding back its monthly asset purchases until ending sometime in the fall but they were not on a "pre-set course".
Slightly mixed bag of data
Pending US home sales edged higher by 0.1 per cent in January, well below what was expected, although the previous month's number has been revised higher.
The University of Michigan's consumer confidence index for the month of February has come in at 81.6 (consensus: 81.2), although the expectations sub-index was off slightly.
MNI's Chicago manufacturing sector Purchasing Managers' Index for the month of February edged higher by 0.2 points to reach 59.8, well above ahead of consensus estimates. "Some panellists cited the negative effect of the poor weather on their business."
US Gross Domestic Product expanded at a 2.4% annualised pace in the fourth quarter (consensus: 2.5%), well below the preliminary estimate of 3.2%. Business spending was revised significantly higher.
KBR Inc. slumped as the military contractor forecast 2014 earnings per share of $1.75 to $2.10, below analysts' estimates of $2.49, and reported fourth-quarter revenue that missed forecasts.
Jos. A. Bank advanced as the menswear chain rejected a $1.78bn bid from Men's Wearhouse late yesterday.
Arena Pharmaceuticals declined as the maker of the weight-loss drug Belviq widened its fourth-quarter loss.
Treasury yields higher
Front month West Texas crude futures were higher by 0.17% to the $102.58/barrel mark on the NYMEX.
10-year US Treasury yields were moving higher by five basis points to the 2.69% mark.