* U.S. economy shrank in Q1; durable orders fall
* Monsanto rallies after results; General Mills lower
* Medical Action almost doubles, Owens & Minor to buy
* Dow up 0.2 pct; S&P 500 up 0.3 pct; Nasdaq up 0.4 pct
(Updates to afternoon)
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 in the first quarter at a 2.9
percent annual rate, a much steeper pace than previously
estimated, though activity was affected by a harsh winter, and
there are indications that growth has since rebounded. In
another negative data point, U.S. orders for durable goods
unexpectedly fell 1 percent in May.
Futures initially fell on the news, but Wall Street showed
signs of strength in early trading. The Dow and the S&P 500
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 32.24 points or
0.19 percent, to 16,850.37. The S&P 500 gained 5.74
points or 0.29 percent, to 1,955.72. The Nasdaq Composite
added 16.61 points or 0.38 percent, to 4,366.97.
The S&P 500 hit an intraday record high 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 help Iraqi security forces counter the
Investors are concerned about the impact that prolonged
turmoil in Iraq could have on oil prices, which have already
climbed 3.8 percent this month.
Monsanto Co shares gained 5 percent to $126.60 after
the world's largest seed company raised the low end of its
full-year outlook, while General Mills Inc fell 3.1
percent to $52.02 after the Cheerios cereal maker's
fourth-quarter earnings missed expectations.
Barnes & Noble Inc rose 3.6 percent to $21.29. 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 previous year.
Medical Action Industries jumped nearly 94 percent
to $13.69 on its heaviest one-day volume ever after Owens &
Minor Inc agreed to buy the company for about $208
million. Owens rose 1.2 percent to $35.27.
Bristol-Myers Squibb Co advanced 2.9 percent to
$49.69 a day after the drugmaker 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 and Jan Paschal)