Stocks rise for a second day; yields slip

Stock indexes moved higher for a second day Wednesday as bond yields fell, easing worries that higher interest rates could upset the economy, AP reported. The Dow Jones industrial average was up 96 points, or 0.7 percent, to 14,857 as of 12: 15 p.m. Eastern Daylight Time. Boeing led the Dow higher with a jump of $2.07, or 2.1 percent, to $100.71. The Standard & Poor's 500 was up 14, or 0.9 percent, to 1,602. All 10 industry sectors in the S&P 500 were up, led by health care stocks. The Nasdaq composite index was up 20 points, or 0.6 percent, to 3,368. Traders bought bonds and yields fell after the government reported that the U.S. economy grew at a significantly slower rate than previously thought in the first three months this year. The annual rate is now estimated at 1.8 percent, compared with an earlier forecast of 2.4 percent. Investors may have decided that the slower-growing economy will influence the Federal Reserve to delay any plans to pull back on stimulus measures. Those measures, which include buying bonds, are meant to prop up the economy by keeping interest rates low and encouraging people to buy stocks. The yield on the 10-year Treasury note, a benchmark for many kinds of loans, fell to 2.56 percent from 2.61 percent late Tuesday. The yield has risen sharply over the last week as traders sold bonds in anticipation of the Fed winding down its bond-buying program. It was 2.19 percent June 18, the day before the Fed outlined its plans. The Dow lost 560 points over Wednesday and Thursday last week. The Dow has gained back only about 100 points since that plunge. Markets were higher in Europe. Benchmark indexes rose 2 percent in France and 1.8 percent in Spain. Borrowing costs fell sharply for Spain and Italy as investors bought European government bonds. At 1.8 percent, U.S. economic growth for 2013 would be less than 2010 or 2012, and in line with 2011. And while investors are glad for growth - after all, the U.S. economy shrank in 2008 and 2009 - most say they'd like to see an annual rate of 3 or 4 percent before they can feel comfortable about the pace of the economic recovery. Gold for August delivery fell $40, or 3.2 percent, to $1,234 an ounce. Gold has fallen 26 percent this year as investors' fears of inflation failed to materialize.