Stocks turned in a strong performance over the course of the trading day on Wednesday, with the major averages more than offsetting the losses posted in the two previous sessions. The strength in the markets came as investors shrugged off some weak GDP results and mulled over remarks from the Federal Reserve.

Before the opening bell, the Commerce Department released a report showing that GDP decreased at an annual rate of 6.1 percent in the first quarter, better than the 6.3 percent drop in the previous quarter, but considerably worse than the 4.7 percent decline economists had anticipated.

A steep drop in private inventories played a big part in the sharper than expected contraction in GDP, however, with the drop in inventories subtracting 2.8 percentage points from first quarter GDP.

The substantial decline in inventories helped to offset a rebound in consumer spending, which rose by a bigger than expected 2.2 percent in the first quarter after falling by 4.3 percent in the fourth quarter and 3.8 percent in the third quarter.

Peter Boockvar, equity strategist at Miller Tabak, noted, The huge inventory drawdown will be reversed to some extent to the upside, thus helping economic activity.

Traders also kept a close eye on the Federal Reserve, which announced its latest decision on interest rates following a two-day monetary policy meeting.

As was expected, the Fed left its target range for the federal funds rate at 0 to 0.25 percent and reiterated that it expects that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

The Fed's accompany statement was largely unchanged from the statement issued following its March meeting, although it did acknowledge that the pace of contraction in economic activity appears to be somewhat slower.

On the corporate front, Bank of America (BAC) was on investors' minds during the session as Chairman and Chief Executive Ken Lewis faced severe shareholder anger at the bank's annual meeting.

While media reports said it appears that Lewis will not be removed, the official results of a vote to split the Chairman and Chief Executive Officer positions is said to be too close to call.

The major averages moved off their best levels of the day going into the close but remained firmly positive. The Dow closed up 168.79 points or 2.1 percent at 8,185.73, the Nasdaq closed up 38.13 points or 2.3 percent at 1,711.94 and the S&P 500 closed up 18.48 points or 2.2 percent at 873.64.

With the upward moves, the Nasdaq ended the session at its best closing level in nearly six months, while the Dow set a more than two-month closing high and the S&P 500 set a three-month closing high.

Sector News

Nearly all of the major sectors showed strong upward moves over the course of the trading day, reflecting broad based strength in the markets. Healthcare provider stocks posted particularly strong gains, pushing the Morgan Stanley Healthcare Provider Index up 6.5 percent.

While Sunrise Senior Living (SRZ) and Psychiatric Solutions (PSYS) helped to lead the healthcare sector higher, Health Management Associates (HMA) also posted a notable gain after being upgraded at Barclays. HMA closed up 2.5 percent, at a seven-month closing high.

Significant strength was also visible among banking stocks, with the Kbw Bank Index closing up 5 percent after posting notable losses in the two previous sessions. Synovus Financial (SNV) and Fifth Third Bancorp (FITB) both closed up nearly 12 percent.

Oil service stocks also saw considerable strength amid a notable increase by the price of oil. With crude for June delivery closing up $1.05 at $50.97 a barrel, the Philadelphia Oil Service Index closed up 4.3 percent.

A variety of other sectors also turned in strong performances, with electronic storage, real estate, and networking stocks posting notable losses.

Dow Components

A vast majority of the Dow components closed higher on the day, contributing to the triple-digit gain posted by the blue chip index. Of the thirty Dow components, only three finished session below the unchanged line.

Financial stocks within the Dow turned in some of the best performances, with Citigroup (C), Bank of America, and JP Morgan (JPM) leading the way higher. Shares of Citigroup closed up 8 percent, while Bank of America and JP Morgan rose 6.5 percent and 5.2 percent, respectively.

Shares of Boeing (BA) also showed a strong upward move over the course of the trading. The aerospace giant closed up 4.4 percent, ending the session at its best closing level since early February.

Disney (DIS), Wal-Mart (WMT), and American Express (AXP) were among the other Dow components that ended the day firmly in positive territory. Shares of Disney closed up 7.7 percent, at a three-month closing high.

Meanwhile, Verizon (VZ) posted a notable loss, ending the session down 1.8 percent. AT&T (T) and McDonald's (MCD) were the only other Dow components that closed lower, posting more modest losses.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region ended Wednesday's trading firmly in positive territory, as traders went bargain hunting. However, the Japanese market remained closed on account of Showa Day.

The major European markets also experienced substantial strength, with the U.K.'s FTSE 100 Index advancing 2.3 percent, while the French CAC 40 Index and the German DAX Index rose 2.2 percent and 2.1 percent, respectively.

In the bond market, treasuries showed a notable decline following the Fed announcement, closing near their lows of the day. Subsequently, the yield on the benchmark ten-year note ended the session up 9.4 basis points at 3.096 percent.

Looking Ahead

Economic data is likely to attract some attention on Thursday, with reports on weekly jobless claims, personal income and spending, and Chicago-area manufacturing activity among those scheduled to be released.

Additionally, trading is also likely to be impacted by reaction to the release of quarterly results from Visa (V) and Starbucks (SBUX) after the closing bell today.

Additionally, Exxon Mobil (XOM) headlines a large group of companies reporting before the opening bell. Expedia (EXPE), Domino's (DPZ), Kellogg (K), Motorola (MOT), Office Max (OMX) and Viacom (VIA) are also on the schedule.

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