June 26 (Bloomberg) -- U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a second day, as China’s cash crunch eased and slower-than-forecast economic growth fueled speculation the Federal Reserve will maintain stimulus.
Citigroup Inc. and Bank of America Corp. advanced at least 0.6 percent. Barrick Gold Corp. and Newmont Mining Corp. fell more than 4.9 percent, leading a selloff in precious-metal producers as gold and silver slumped to 34-month lows.
The S&P 500 increased 0.8 percent to 1,600.89 at 9:48 a.m. in New York, after the equity benchmark rebounded from a nine- week low yesterday. The S&P 500 has lost 1.9 percent in June, paring its advance in the second quarter to 2 percent. The Dow Jones Industrial Average climbed 118.91 points, or 0.8 percent, to 14,879.22 today. Trading of S&P 500 companies was about in line with the 30-day average at this time of day.
"We’ve had a relatively sharp selloff over a couple of days and we’re getting a bounce here," James Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.6 billion in assets, said in a phone interview. "Weaker economic numbers may be met with favor by the market because it can suggest that the Fed can slow the tapering process or not taper if the economy looks weaker than expected."
Gross domestic product expanded at a revised 1.8 percent annualized rate from January through March, down from a prior estimate of 2.4 percent, figures from the Commerce Department showed today in Washington. Household purchases, which account for about 70 percent of the economy, were revised to a 2.6 percent advance compared with the 3.4 percent gain estimated last month.
The S&P 500 climbed 1 percent yesterday after reports on durable-goods orders, new house sales and consumer confidence bolstered confidence in the economy. The gauge has still retreated 4.1 percent from a record high reached May 21 as Federal Reserve Chairman Ben S. Bernanke said the central bank may start paring quantitative-easing measures this year if the recovery continues to improve in line with forecasts.
Central bank stimulus has helped fuel a rally in stocks worldwide, with the benchmark U.S. index surging as much as 147 percent from its March 2009 low.
Stocks advanced in Asia and Europe today as the cost of locking in China’s interest rates slid for a fourth day and money-market rates fell. The People’s Bank of China said in a statement yesterday that it has provided financing to some financial institutions to stabilize interbank lending rates. The central bank added that it will use short-term liquidity operations and existing loan-facility tools to ensure steady markets.