(Updates to midmorning)
By Ellis Mnyandu
NEW YORK, April 30 (Reuters) - U.S. stocks rose on
Wednesday as investors focused on a report showing strength in
the labor market and stronger-than-expected financial results
from two blue-chip companies.
A government report showed stronger-than-expected growth in
first-quarter gross domestic product, but the Commerce
Department data also revealed trouble spots in the economy,
including weak consumer spending and rising business
inventories that could hurt growth later.
Among the Dow Jones industrials, General Motors Corp <GM.N>
said overseas sales helped to alleviate weakness in the U.S.
market. Its stock was up 9 percent.
Consumer products maker Procter & Gamble Co <PG.N> reported
profit above expectations, pushing up its stock 3 percent
higher.
GDP, the government's broadest measure of economic activity
within U.S. borders, beat economists' expectations for the
first quarter and a survey by ADP Employer Services showed
employers unexpectedly added 10,000 jobs in April.
Both economic reports came on the day that the Federal
Reserve is due to decide on interest rates.
"There was nothing that scared investors as far as GDP and
the ADP reports are concerned. It was a relief, combined with
news of Procter & Gamble and other companies doing better than
expected," said Alan Lancz, president of Alan B. Lancz &
Associates Inc, an investment advisory firm, in Toledo, Ohio.
The Dow Jones industrial average <> rose 63.59 points,
or 0.50 percent, to 12,895.53. The Standard & Poor's 500 Index
<.SPX> gained 4.45 points, or 0.32 percent, to 1,395.39. The
Nasdaq Composite Index <> climbed 13.72 points, or 0.57
percent, to 2,439.82.
Even so, the early gains could be affected later on
Wednesday by the Fed's rate decision, expected at 2:15 p.m.
(1815 GMT), Lancz added.
"You've got a situation where nothing much is going to
happen until people find out not only what the Fed does, but
also what it says. That's going to be the main impetus to the
day," he said.
The U.S. central bank is widely expected to lower key rates
a quarter-percentage point. Investors will also focus on the
Fed's statement for clues on whether its cycle of rate cuts may
be ending.
P&G shares climbed to $67.94 on the New York Stock
Exchange, while GM shares rose to $23.19.
Among drags, Citigroup Inc <C.N> led decliners after the
largest U.S. bank increased the size of a stock offering for a
surprise plan to raise fresh capital. Its stock fell 0.9
percent to $25.40.
U.S. stocks extended gains after a reading of business
activity in the U.S. Midwest came out slightly less weak than
expected despite contracting in April for a third straight
month.
Wednesday's early advance had the benchmark S&P 500 <.SPX>
looking to notch its best monthly advance in 4 1/2 years.
(Editing by Kenneth Barry)
