Stocks Opened Higher after Strong GDP Data

U.S. stocks opened higher on Wednesday, after the government reported the economy grew much faster in the second quarter than Wall Street had expected. The Dow Jones Industrial Average laytely gained 54.63 points, or 0.32%, to 16,966.74. The S&P 500 was up 6.95 points, or 0.35%, to 1,976.90. The Nasdaq Composite rose 32.16 points, or 0.72%, to 4,474.85.

U.S. economic growth accelerated more than expected in the second quarter and the decline in output in the prior period was less steep than previously reported, bolstering views for a stronger performance in the last six months of the year. Gross domestic product expanded at a 4.0 percent annual rate as activity picked up broadly after shrinking at a revised 2.1 percent pace in the first quarter, the Commerce Department said on Wednesday.

Inflation as measured by the Federal Reserve’s preferred price index surged in the second quarter to the highest annual rate in three years.The PCE index rose at a 2.3% annual rate in the April-to-June period, compared to 1.4% in the first quarter.

Private-sector hiring slowed down slightly in July but remained healthy and broad-based. Employers added 218,000 private-sector jobs this month, down from 281,000 in June, Automatic Data Processing reported. This is the fourth straight month of job growth above 200,000.

Pitney Bowes posted second-quarter revenue of $958 million, up from $951 million in the year-ago period. The company also raised its outlook for earnings-per-share fiscal-year 2014 to between $1.80 and $1.90 a share from between $1.75 and $1.90 a share.

Humana Inc. said its second-quarter profit fell 18% as a surge in benefit costs helped offset an increase in revenue. The company reported a second-quarter profit of $344 million, or $2.19 a share, down from $420 million, or $2.63 a share, in the prior-year period. Revenue rose 18% to $12.22 billion.

WellPoint Inc. on Wednesday said its second-quarter profit slipped as the health insurer recorded higher expenses, masking a boost in revenue and enrollment. For the second quarter, WellPoint reported a profit of $731.1 million, or $2.56 a share, down from $800.1 million, or $2.64 a share, a year earlier. Excluding gains on investments and other items, per-share earnings fell to $2.44 from $2.60. Total operating revenue rose 4.2% to $18.23 billion.