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US STOCKS-Wall St rises as Fed concerns ease; GDP estimate cut

Source : REUTERS
Last Updated: Wed, Jun 26, 2013 14:20 hrs

* Mining stocks under pressure as gold tumbles

* General Mills slips after results

* U.S. Q1 final growth estimate cut to 1.8 pct

* Indexes up: Dow 0.83 pct, S&P 0.8 pct, Nasdaq 0.68 pct

By Chuck Mikolajczak

NEW YORK, June 26 (Reuters) - U.S. stocks climbed on Wednesday, putting the S&P 500 on track for its biggest two-day gain in three weeks, as concerns eased that the U.S. Federal Reserve will soon rein in its stimulus measures.

The S&P 500 's advance came on the back of a gain of nearly 1 percent on Tuesday, as data on durable goods orders, sales of new homes and consumer confidence all topped analysts' expectations and the People's Bank of China eased concerns about a possible banking crisis in the world's second-largest economy.

Still, the benchmark S&P index is down 3 percent since June 19, when the Fed signaled it may begin to scale back its stimulus efforts should its economic forecasts hold.

"If you look at the actual statement (Fed stimulus) is going to be data dependent and if you look at the Fed forecasting, they are usually more optimistic than what has actually happened," said Rick Robinson, regional chief investment officer for Wells Fargo Private Bank in Scottsdale, Arizona.

"So the markets are finally realizing (the Fed's moves) will be data dependent, let's watch and see what happens to the data."

Data showed a final estimate for gross domestic product growth at a 1.8 percent annual rate. Economists in a Reuters survey forecast a 2.4 percent annualized pace of growth, the same as the preliminary estimate for the quarter.

"Everyone wants to know when the Fed is going to taper so it's really looking forward, what is the second quarter going to be?" said Robinson.

Gold stocks were under pressure as the precious metal fell to its lowest in almost three years, putting it on course for a record quarterly loss.

U.S.-listed shares of Gold Fields Ltd dropped 5.3 percent to $4.81 and Barrick Gold Corp lost 4.9 percent to $15.32. The NYSEArca gold bugs index, comprising a basket of unhedged gold stocks, declined 4.3 percent.

The Dow Jones industrial average gained 122.91 points, or 0.83 percent, to 14,883.22. The Standard & Poor's 500 Index rose 12.66 points, or 0.80 percent, to 1,600.69. The Nasdaq Composite Index advanced 22.93 points, or 0.68 percent, to 3,370.82.

Microsoft Corp climbed 1.2 percent to $34.02 as the top boost to the Nasdaq 100 index after Morgan Stanley raised its rating on the software company to "overweight."

Monsanto Co edged up 0.1 percent to $101.52 after the world's largest seed company said its quarterly profit fell, but sales remained on an upswing.

Food manufacturer General Mills slipped 1 percent to $47.86 after giving a forecast for the new fiscal year that fell shy of expectations, even as its quarterly profit was in line with estimates.

Other S&P 500 companies due to report on Wednesday include Bed, Bath & Beyond Inc and Paychex Inc.

Equities may also receive a boost from "window dressing" by fund managers at the end of the quarter, the practice of selling underperforming stocks and buying outperformers, to enhance the appearance of their portfolios.



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