- The Washington Times - Thursday, April 30, 2009

Wall Street closed Wednesday with gains after the Federal Reserve said the recession shows signs of easing.

The Dow Jones Industrial Average closed at 8,185.73, up 168.78 points. The broader Standard & Poor’s 500 Index closed at 873.64, up 18.48 points, and the tech-heavy Nasdaq Composite Index closed at 1,711.94, up 38.13 points.

The central bank said the U.S. economy continues to contract but has done so at a “somewhat slower” pace since March, so the Fed will keep interest rates at record-low levels.

U.S. markets posted the gains despite the federal government’s gross national product report showing the U.S. economy’s worst six-month performance in a generation.

The economy shrank 6.1 percent in the first quarter of 2009 after falling 6.3 percent in the final three months of 2008, according to the Commerce Department report. The collapse of lending markets and the U.S. auto industry were among the biggest contributors to the biggest half-year drop in economic activity since the 1981 recession, the report stated.

Brian Lipps, a Charles Schwab & Co. vice president, said investors were more focused Wednesday on recent consumer numbers, including those in the GNP report that show a 2.2 percent increase in consumer spending.

He also said the Fed’s “standing pat” on interest rates, for the first time since the middle of last year, is a sign the bank did not need to react to the economy and points to a recovery.

Bank of America stock was up 6.50 percent, to $8.68 a share at the close of trading. Citigroup Inc. was up 5.88 percent, to $3.06.

The Dow remains 22 percent above its record 12-year low in early March, but failed last week to extend its six-week rally. Stock prices were up and down earlier this week amid fears about the global economic impact of swine flu, which started in Mexico and has spread to at least six other countries.

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