Wall St indices close higher despite US GDP contraction

Traders work on the floor of the New York Stock Exchange, on April 28, 2022. PHOTO: REUTERS

NEW YORK (AFP) - Major US indices finished higher on Thursday (April 28), recouping losses suffered earlier in the week despite data showing the economy shrank in the first quarter.

The benchmark Dow Jones Industrial Average rose 1.8 per cent to close at 33,916.26, while the tech-rich Nasdaq Composite Index was up 3.1 per cent at 12,871.53.

The S&P 500 gained 2.5 per cent to end at 4,287.76.

The Commerce Department reported a surprise 1.4 per cent drop in GDP in the first quarter of this year, but much of that was due to an increase in imports and decline in inventories, while spending remained strong.

The latest earnings were mixed, with Facebook parent Meta reporting better-than-expected results and McDonalds saying sales rose but profits fell.

Twitter saw profits rise but revenues come in slightly below forecasts, as investors await developments on its agreement to be bought by Elon Musk.

"Everyone on Wall Street knew to expect enhanced volatility in the first quarter given the war in Ukraine, the impact of the Omicron wave, and as the economy grappled with inflation," Edward Moya of Oanda said.

With the US Federal Reserve meeting next week amid expectations of a half-percent rate hike, "today's economic data does not change anything for the Fed and markets should continue to think they are on a clear path to raise rates rapidly over the next couple of policy meetings."

Meta climbed 17.6 per cent at the close, while Twitter finished 1 per cent higher.

Join ST's Telegram channel and get the latest breaking news delivered to you.