US stocks edged up yesterday, erasing early losses as investors brushed off disappointing economic data and bet on a further rally in equities.
The gains came after major indexes hit multi-year highs in the previous session. The enthusiasm in the market had pushed the Nasdaq to a 10-year high, and the Dow is now up 10 per cent and the S&P 500 up 8 per cent for the year.
Stocks were pressured at the open after a report showed new US claims for unemployment benefits surprisingly rose last week to their highest level since January.
Separate data showed US economic growth slowed more than forecast in the first three months of the year as higher food and gasoline prices dampened consumer spending and sent a broad measure of inflation rising at its fastest pace in two-and-a-half years. "Investors are willing to look through the GDP data because most of the weakness was beyond the consumer... If you really just look at the organic power of the consumer, for the most part it is remarkable to me that spending is as strong as it is in the face of $4 petrol prices," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.