US stocks gain after stronger-than-expected economy report

New York: US stocks closed higher as the market was buoyed by a better-than-expected US GDP growth for the first quarter, offsetting a string of falling chip stocks.

The Dow Jones Industrial Average increased 81.25 points, or 0.31 percent, to 26,543.33 on Friday. The S&P 500 increased 13.71 points, or 0.47 percent, to 2,939.88. The Nasdaq Composite Index increased 27.72 points, or 0.34 percent, to 8,146.40, Xinhua reported.

Shares of Intel plunged 8.99 percent, as the tech giant’s revenue forecast for 2019 fell short of market expectations, which also offset its stronger-than-expected earnings for the first quarter.

Shares of Western Digital tumbled over 3.83 percent, as the U.S. data storage service provider’s stock was downgraded to “underperform,” amid concerns over the health of its businesses due to large stock appreciation, according to media reports.

Yet shares of Ford Motor surged over 10.74 percent, following its latest quarterly earnings that blew past analysts’ estimates, which were driven by strong demand for its pickup trucks and SUVs in North America.

Nine of the 11 primary S&P 500 sectors traded higher around market close, with the health care sector up nearly one percent, leading the winners.

On the economic front, U.S. first-quarter GDP grew 3.2 percent, beating market expectations.

The 3.2 percent annual growth rate of real gross domestic product, announced by the Department of Commerce on Friday, indicated an acceleration of economic expansion from the downwardly revised annual rate of 2.2 percent in the fourth quarter of 2018.

The pickup in pace is mostly driven by strong exports and private inventory investment, according to the department’s report.

However, growth in residential investment, a proxy for housing construction, fell to 2.8 percent in the first quarter, marking the fifth drop in a row.

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