By Alexandra Scaggs
U.S. stocks opened broadly higher on Wednesday, as rising hopes of economic stimulus from Asia helped boost investor confidence.
The Dow Jones Industrial Average rose 107 points, or 0.7%, to 16370. The S&P 500 index advanced 10 points, or 0.5%, to 1853 and the Nasdaq Composite Index climbed 26 points, or 0.6%, to 4059.
On Tuesday, stocks ended a roller-coaster session broadly higher. The Dow closed up 89 points to post the best two-day point gain since March 18.
The Nasdaq Composite led benchmarks higher, bolstered by strong gains in social-media and biotechnology stocks. The Nasdaq Biotechnology Index rose 0.9% in early trading. The Nasdaq has been roiled in recent sessions as investors fled social-media and biotech stocks, and even with Wednesday's early gains, the biotech index is down 3.4% for the year.
Helping drive the early gains was a report showing that China's gross domestic product grew 7.4% in the first quarter, the slowest rate in 18 months, but above economists' forecasts of 7.3%. Traders said the slowing pace of growth raised investor hopes of more stimulus from the Chinese government.
"The Chinese data certainly corroborates the idea that the economy is slowing, but at the same time officials have become concerned enough" that more stimulus could be a possibility, said Dan Greenhaus, chief market strategist at New York brokerage firm BTIG. And that is a positive factor for stocks globally, he said.
Stock futures had pared some of their gains premarket after U.S. housing data missed forecasts. New residential construction for March rose 2.8% to a seasonally adjusted annualized rate of 946,000, falling well below forecasts of a rise of 6.4% to a seasonally adjusted annualized rate 965,000. Building permits fell 2.4% to 990,000, versus forecasts of 1.01 million.
In other economic news, industrial production rose 0.7% in March, while a rise of 0.4% was forecast. Capacity utilization rose by more than expected.
At 12:25 p.m., Federal Reserve Chairwoman Janet Yellen is giving a speech on monetary policy and the economic recovery at the Economic Club of New York. The Fed's "beige book" report, a read on the U.S. economy from anecdotes gathered by the central bank's 12 districts, is due in the afternoon.
The yield on the 10-year Treasury note rose to 2.648% from 2.628% late Tuesday.
Write to Alexandra Scaggs at firstname.lastname@example.org