LONDON (AP) — Disappointing U.S. economic growth figures failed to alter the mood in financial markets Wednesday, which has seen most stocks eke out solid gains for the second day running.
However, gold prices remained under pressure, falling to near three-year lows at one stage as the strength of the dollar continues to undermine the precious metal.
Over recent weeks, markets have been volatile amid concerns over U.S. monetary policy. Last week's confirmation from Ben Bernanke, the chairman of the Federal Reserve, that the central bank may start reining in its monetary stimulus this year prompted big falls in stock markets as well as a sharp appreciation in the dollar. The extra money provided by the stimulus in recent years has found its way back into financial markets, shoring up stock markets, but keeping a lid on the dollar.
However, U.S. economic growth figures for the first quarter suggested that the so-called tapering in asset purchases by the Fed may not happen as soon as many investors have predicted.
Instead of the previous 2.4 percent annualized increase estimated, the Commerce Department said the U.S. economy only grew at a 1.8 percent tick, with most components contributing less than thought.
Though the news may be positive for stocks in that it may ease tightening fears, investors were disappointed that the U.S. economy is not as strong as thought. As a result, stocks were largely unchanged from the levels they were before the release.
"Although the reading is strictly taper-negative, it is by now rather outdated with this Friday marking the end of the second quarter," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. "As such the stock market appears to be taking the revision in its stride."
