Wall Street gains after Chinese data, Yahoo up on Alibaba

NDTV Profit Desk

16 Apr 2014, 10:04 PM IST

US stocks rose for a third straight session on Wednesday after China's economic growth exceeded expectations and Yahoo shares rallied on the strength of revenue growth in Chinese e-commerce giant Alibaba, in which it has a stake.

China, the world's second-largest economy, grew at its slowest pace in 18 months at the start of 2014, but the rise was better than expected and showed some improvement in March.

The global economy should grow steadily at best over the coming year, a Reuters poll showed, but any rapid slowdown in China could upset the progress.

"There is a lot of concern about Chinese growth this year so there is some relief in the GDP number," said Jim Russell, senior investment strategist at US Bank Wealth Management in Cincinnati.

"We think that is influencing the market today."

Yahoo was the leading percentage gainer on the S&P 500 as revenue growth accelerated in the last quarter of 2013 for Alibaba, in which Yahoo holds a 24 per cent stake. Yahoo shares jumped 7.3 per cent to $36.72.

The Dow Jones industrial average rose 94.05 points, or 0.58 per cent, to 16,356.61.

The S&P 500 gained 8.84 points, or 0.48 per cent, to 1,851.82.

The Nasdaq Composite added 25.309 points, or 0.63 per cent, to 4,059.47.

The market has bounced back from last week's pummeling, which saw the S&P 500 post its largest weekly decline since mid-2012. Earnings this week, including those of Citigroup and Coca Cola, as well as a rebound in biotechnology stocks have supported the market.

Intel shares rose 1 per cent to $27.03 a day after the chipmaker posted a quarterly net profit that exceeded Wall Street's estimates.

But Bank of America slid 3.5 per cent to $15.81 after the No. 2 US bank posted a quarterly loss.

US manufacturing output rose for a second straight month in March in a sign of recovery from a harsh and prolonged winter that had put a damper on activity.

Futures had earlier held on to most of their gains even as US housing starts rose less than expected in March and building permits fell, pointing to underlying weakness in the housing market. However applications for home mortgages rose last week as interest rates declined.

Markets continue to keep an eye on east Ukraine, where government forces and separatist pro-Russian militia staged rival shows of force on the eve of talks in Geneva on the former Soviet country's future.

The market will also monitor Federal Reserve Chair Janet Yellen's speech and question and answer session at the Economic Club of New York at 1625 GMT for clues on how soon the US central bank expects interest rates to rise.