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Dow Reaches All-Time High as Stock Marklets Get Fed Boost

Stocks rose, pushing the Dow through its all-time high, as investors welcomed the Federal Reserve's reduction of monthly bond purchases
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Stocks edged up on Wednesday, pushing the Dow through its all-time high, as investors welcomed the Federal Reserve's reduction of monthly bond purchases while looking past data showing the economy slowed more than expected in the first quarter.

The Dow Jones Industrial Average, which has been inching up for several days, closed unofficially 45 points higher at 16,580.84, eclipsing its record closing high of 16,576.66, last Dec. 31. The S&P 500 rose 5 points and the Nasdaq was 11 points higher.

"Who would imagine we would get a first-quarter GDP print so disappointing and yet we're closing the stock market at a high. That shows investors are absolutely looking past the first quarter, and looking to the Fed to continue with lower rates," said Chris Gaffney, senior market strategist at Everbank..

In its not-unexpected statement, the central bank said the economy has gained traction recently after a sharp slowdown. It trimmed its monthly asset purchases to $45 billion, making its fourth consecutive $10 billion cut.

"The Fed has given investors what they were expecting, and investors like that stability," said Gaffney.

Equities had fluctuated ahead of the Fed move while weighing reports that had growth stalling in the first quarter and employers adding more workers than projected to their payrolls in April.

Ahead of the opening, stock futures offered a muted reaction to the government's estimate that the U.S. economy grew 0.1 percent in the first quarter, versus a 1.2 percent estimate.

"GDP was a bit of a shock, there is no doubt about that, but that fact that nobody is talking about recession and futures are flat tells you all you need to know. The economy was impacted by the weather and will likely improve as the year progresses," said Dan Greenhaus, chief global strategist at BTIG.

Another report, from ADP, had private employers adding 220,000 workers in April, with the prior month's job additions revised up to 209,000 from 191,000.

"The ADP report was more or less in line, but shows there was job creation in the month, and according to ADP it was the first back-to-back months of 200,000 jobs created since 2012, so that's a positive," said Greenhaus.

The dollar declined against other global currencies while the 10-year Treasury yield dipped 5 basis points to 2.647 percent. The price of crude and gold fell, with oil futures off $1.54 to finish at $99.74 a barrel; gold futures dropped 40 cents to settle at $1,295.90 an ounce.