The Dow Jones Industrial Average (DJINDICES: ^DJI ) overcame a weak GDP report to close at a new record high today of 16,580 after a gain of 45 points, or 0.3%. The Federal Reserve's decision to continue its stimulus taper gave markets an added boost of confidence, lifting stocks late in the afternoon. Some analysts had suspected that the central bank would hold off on the latest round of cuts to the bond-buying program after the Commerce Department reported GDP growth of just 0.1% in the first quarter.
In its Open Market Committee report, the Fed said it saw indicators that "growth in economic activity has picked up," and the central bank noted that household spending was improving. Though first-quarter GDP growth was worse than the 1% expected, the Fed, like many investors, attributed that mostly to poor winter weather, and recent economic indicators have shown strength returning after a slow winter.
Those reports continued today as ADP, the nation's largest payroll processor, reported that 220,000 jobs were added to the economy in April, slightly ahead of forecasts of 215,000. The survey bodes well for the official jobs report due out Friday, for which expectations are set 200,000 new jobs. Also this morning, the Chicago Purchasers Managing Index jumped to 63 from 55.9 in March, beating estimates at 56.5. The strong increase indicates a robust expansion in manufacturing in the Midwest, yet another sign that the economy is returning to health following poor reports this winter.
After hours today, Yelp (NYSE: YELP ) shares were speeding higher, gaining 5% after delivering better-than-expected results in its quarterly earnings report. The business-review site posted a loss of $0.04 per share against estimates of a $0.06-loss, while revenue jumped 65.7% to $76.4 million, ahead of the consensus at $75.05 million. Also promising was the company's average monthly visitors increasing 30% to 132 million. International growth was especially bright as reviews outside the U.S. grew 210% and international visitors were up 95%. Yelp also raised full-year guidance to $363-367 million, above estimates at $358.9 million. It was a solid quarter for the reviews specialist, but the company's valuation seems like the biggest question mark for investors as it's still putting up losses and carries a whopping P/S ratio of 18.
Earlier in the day, Garmin (NASDAQ: GRMN ) shares finishied up 3.7% on its own strong quarterly report. The gadget-maker posted a per-share profit of $0.55 on estimates of $0.44 as it found continuing success in its outdoor, fitness, and aviation segments. Sales grew much faster than expected, improving 9.6% to $583.2 million against the consensus of $541.2 million. The electronics-maker continues to surprise the market as it finds new angles for growth amid the decline of stand-alone GPS that was once its trademark product. The company did not provide forward guidance, but nonetheless said it experienced a strong start to the year, saying that the quarter "exceeded expectations."
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