* U.S. economy contracts in Q1; durable orders fall
* Investors still see value in equities
* Monsanto rallies after results, General Mills lower
* Dow, S&P 500 and Nasdaq all rise 0.2 percent
(Updates to open)
By Ryan Vlastelica
NEW YORK, June 25 U.S. stocks edged higher on
Wednesday as investors continued to find value in equities over
other asset classes despite the latest economic data coming in
The U.S. economy contracted 2.9 percent in the first
quarter, a much steeper pace than previously estimated, though
activity was impacted by harsh winter weather and there are
indications that growth has since rebounded. In another negative
data point, orders for durable goods unexpectedly fell 1 percent
Futures initially fell on the news but Wall Street showed
signs of strength in early trading. The S&P 500 and Dow remain
within striking distance of record levels.
"As long as investors believe the economy will keep growing,
and everyone expects growth in the second quarter, the lesser
evil will be to buy equities at a modestly higher valuation,
since bonds and cash don't represent better values," said Bruce
McCain, chief investment strategist at Key Private Bank in
The Dow Jones industrial average rose 35.07 points or
0.21 percent, to 16,853.2, the S&P 500 gained 3.25 points
or 0.17 percent, to 1,953.23 and the Nasdaq Composite
added 8.23 points or 0.19 percent, to 4,358.59.
The S&P 500 had hit an intraday record on Tuesday before
concerns over Iraq turned indexes sharply lower in afternoon
trading. Those tensions remained in focus after militants in
Iraq attacked one of the country's largest air bases. The first
U.S. teams arrived to assess Iraqi security forces and decide
how to help counter the violence.
Investors are concerned about the impact prolonged turmoil
in Iraq could have on oil prices, which are already up 3.8
percent this month.
U.S. crude futures fell 0.3 percent to $105.71 per
barrel in early trading, erasing earlier gains. Analysts have
speculated that prices above $115 per barrel for an extended
period would weigh on economic activity.
Monsanto Co rose 5.3 percent to $126.99 after it
raised the low end of its outlook, while General Mills Inc
fell 3.3 percent to $51.95 as its fourth-quarter
earnings missed expectations.
Barnes & Noble Inc popped 10 percent to $22.61. The
book retailer said it would spin off its Nook tablets and
college books business. It also reported a quarterly loss that
narrowed from the prior year.
Medical Action Industries jumped 94 percent to
$13.71 on its heaviest ever one-day volume after Owens & Minor
Inc agreed to buy the company for about $208 million.
Owens rose 1.2 percent to $35.28.
Bristol-Myers Squibb Co rose 3.1 percent to $49.81 a
day after saying said a late-stage trial testing its
immunotherapy nivolumab in advanced melanoma patients was halted
early after it was determined that the drug was likely to
(Editing by Nick Zieminski)