Stocks rose on Friday as investors shook off a disappointing reading on U.S. economic growth and worrisome signs from Spain after the country received a credit-rating downgrade.
The Dow Jones industrial average closed at 13,228.31, up 23.69 points, or 0.2 per cent. The broader S&P 500 closed at 1,403.36, up 3.38 points, or 0.2 per cent – marking its fourth straight day of gains. In Canada, the S&P/TSX composite index closed at 12,237.75, up 91.90 points, or 0.8 per cent.
U.S. gross domestic product rose 2.2 per cent in the first quarter, at an annualized pace, which was below expectations for growth of 2.5 per cent. However, the disappointment was largely blamed on declining defence spending.
Meanwhile, Spain raised concerns about the simmering European debt crisis after Standard & Poor's cut the country's credit rating by two notches – potentially raising Spain's borrowing costs at a bad time: Unemployment has risen to a two-decade high and the economy has slipped into its second recession in three years amid cutbacks in government spending.
Despite the downgrade, European markets held up. Germany's DAX index rose 0.9 per cent and the U.K.'s FTSE 100 rose 0.5 per cent. Bond yields were relatively steady, with even Spain's 10-year government bond rising only slightly above 5.8 per cent.
Among the Dow's big movers, Cisco Systems Inc. rose 1.9 per cent, McDonald's Corp. rose 1.6 per cent and Coca-Cola Co. rose 1.2 per cent.
However, Procter & Gamble fell 3.6 per cent – which is a big move for the consumer products giant – after delivering a disappointing earnings forecast. Ford Motor Co. fell 2.3 per cent after its first-quarter earnings fell 45 per cent. Amazon.com Inc. surged 15.8 per cent after its sales rose 34 per cent.
Canada's benchmark index was given a boost by commodity producers. Suncor Energy Inc. and Canadian Oil Sands Ltd. rose 0.5 per cent each, while Barrick Gold Corp. rose 1.4 per cent.
David Berman