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Published: 8/29/2012

Stocks edge up after government revises second-quarter growth higher

BY MATTHEW CRAFT
AP BUSINESS WRITER

NEW YORK — Slightly better economic growth and stronger housing sales nudged the stock market higher today.

The Dow Jones industrial average edged up six points to 13,110 shortly after noon.

Major indexes opened slightly higher after the government said the economy grew at a quicker pace in the spring than first thought.

The U.S. economy expanded at a 1.7 percent annual rate from April through June thanks to rising consumer spending and exports. That’s an improvement from the initial estimate of 1.5 percent, but not enough to put a dent in the unemployment rate.

The National Association of Realtors said its index of sales for previously owned homes increased 2.4 percent in July, reaching its highest level since April 2010, the last month buyers could qualify for a federal tax credit.

“It’s a mixed message overall,” said JJ Kinahan, chief derivatives strategist at TD Ameritrade. “We all know we need 2 percent [economic] growth. And you can’t continue to improve on housing if the unemployment picture doesn’t improve. At some point, the numbers have to match.”

In other trading, the Standard & Poor’s 500 index added one point to 1,410, while the Nasdaq composite index inched up three points to 3,080.

Crude oil dipped 1.5 percent to $94.87. Hurricane Isaac made landfall Tuesday night, but its heavy winds and rain aren’t expected to cause extensive damage to oil production and refinery operations in the Gulf of Mexico.

Markets have slipped into a late-summer lull. Indexes have barely budged amid some of thinnest trading days this year. For the week, the S&P 500 index is down one point.

Just 7.7 billion shares were traded on the New York Stock Exchange over the previous three days, the slowest three-day stretch since December 2011, according to FactSet data. One measure of stock-market volatility, the Vix, recently sank to a five-year low.

Kinahan said the market’s apparent lack of direction makes sense, especially ahead of the Labor Day weekend and a highly anticipated speech by Federal Reserve Chairman Ben Bernanke on Friday.

“There’s no incentive to take a big trading position,” he said. “Many people I know plan on taking a three-day weekend or are just coming in for the speech to see if [Bernanke] says anything interesting or market-moving. If not, they’re outta there.”

A handful of companies reported earnings today. H.J. Heinz posted a 14 percent jump in quarterly net income, driven by higher prices and emerging-market sales. The clothing-store chain Jos A. Bank posted stronger sales and revenue than Wall Street expected, and its stock soared $7.10 to $48.73.

Among other stocks making big moves:

— Joy Global sank 1 percent. The supplier of coal mining equipment reported results early Wednesday that missed analysts’ estimates and also cut its full-year earnings outlook as demand for coal in the U.S. and China slows. The company’s stock lost 35 cents to $52.75.

— Sealed Air Corp. jumped 8 percent, the S&P 500’s biggest gain, after the food packaging company said a former Dow Chemical executive would take over when its current CEO retires. The former Dow executive has experience with mergers, and Sealed Air bought a cleaning and sanitation company last year. The company’s stock gained $1 to an even $14.



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