US stocks have surged after investors took a positive view of reduced growth estimates.
The Dow Jones Industrial Average jumped 149.83 (1.02 per cent) to 14,910.14.
The broad-based S&P 500 rose 15.23 (0.96 per cent) to 1,603.26, while the tech-rich Nasdaq Composite Index added 28.34 (0.85 per cent) to 3,376.22.
The gains came after the Commerce Department slashed its estimate for first-quarter growth from 2.4 per cent to 1.8 per cent.
Investors took this as a sign the Federal Reserve would maintain its aggressive bond-buying program.
“If we are not seeing economic improvement, the Fed is not going to remove their QE,” said Michael James, managing director of trading at Wedbush Morgan Securities.
Analysts said the market was also primed to rally after a steep sell-off last week, brought on by worries then of a pullback in Fed stimulus.
Big companies posting large gains included Microsoft (up 2.1 per cent), Boeing (up 2.1 per cent) and Johnson & Johnson (up 1.9 per cent).
General Mills fell 0.5 per cent after forecasting that 2014 earnings would come in at $2.87-$2.90 per share, below the $2.93 seen by analysts.
Agrotech giant Monsanto dropped 0.6 per cent after revenues came in at $4.2 billion, below the $4.4 billion forecast by analysts. Profits were six cents per share above the $1.60 expected.
Coal producers Arch Coal (-5.0 per cent), Consol Energy (-3.0 per cent) and Peabody Energy (-3.3 per cent) continued to sink in the wake of the Obama administration’s climate policy announced Tuesday, which could force costly investments in clean technologies and promotes rival energy sources.
Generic pharmaceutical manufacturer Mylan edged 0.3 per cent higher after announcing it would launch a generic version of sexual dysfunction drug Viagra in 11 European countries.
Bond prices jumped. The yield on the 10-year US Treasury fell to 2.54 per cent from 2.59 per cent Tuesday, while the 30-year fell to 3.57 per cent from 3.61 per cent. Bond prices move inversely to yields.
