Stocks have moved sharply higher over the course of morning trading on Wednesday, with the major averages moving back to the upside after ending the two previous sessions in the red. The advance comes as traders shrug off some weaker than expected economic data.

A Commerce Department report released before the open showed that GDP decreased at an annual rate of 6.1 percent in the first quarter compared to a 6.3 percent drop in the fourth quarter. Economists had been expecting a more modest decline of about 4.7 percent.

However, the bigger than expected drop in GDP was due in large part to a substantial decrease in private inventories, 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.

Some buying interest also comes as traders shrug off some of the recent concerns about the economic impact of the swine flue outbreak.

In a morning press conference, President Barack Obama assured the public that the government is fully dedicated to stopping the spread of the disease, noting the $1.5 billion request for emergency funding he sent to Congress Tuesday.

Later in the day, trading is likely to be impacted by the Federal Reserve's announcement of the outcome of its two-day policy-setting meeting.

While the Fed is widely expected to leave interest rates unchanged, traders are likely to pay close attention to the accompanying statement, looking for indications of the Fed's future plans regarding the capital markets as well as its outlook for the economy.

In corporate news, Time Warner (TWX) reported adjusted first quarter earnings of $0.45 per share on revenues of $6.95 billion. Analysts had expected the company to report earnings of $0.38 per share on revenues of $6.78 billion. The media giant also reaffirmed its full-year guidance.

The major averages have continued to move higher in recent trading, rising to new highs for the session. The Dow is currently up 134.37 at 8,151.32, the Nasdaq is up 32.17 at 1,705.98 and the S&P 500 is up 15.70 at 870.86.

Sector News

Healthcare provider stocks are turning in some of the market's best performances, as traders expect the companies to benefit from the swine flu outbreak. The Morgan Stanley Healthcare Providers Index is up 6.3 percent, rising to its highest level in over six and a half months.

Significant strength is also visible among banking stocks, as reflected by the 5.3 percent gain currently being shown by the Kbw Bank Index. Bank of America (BAC) and Citigroup (C) are showing notable moves back to the upside after falling sharply on Tuesday.

Bargain hunting is also contributing to considerable strength among airline stocks, with the Amex Airline Index up 3.8 percent after posting steep losses in the two previous sessions. Electronic storage, real estate, gold, and telecom stocks are also posting notable gains.

Stocks Driven By Analyst Comments

Coca-Cola Enterprises (CCE) is posting a 4.5 percent gain following an upgrade to Buy from Neutral at Merrill/BofA. With the advance, the stock is trading at its highest level in over six and a half months.

The upgrade came as earnings estimates were raised to reflect higher volumes and a better pricing environment.

Additionally, Activision Blizzard (ATVI) is up 6.5 percent after being upgraded at Goldman Sachs to Buy from Neutral as analysts see an attractive late-2009 game line-up and reduced investor focus on music genre weakness. The stock's price target was also raised to $14 from $10.

Meanwhile, Bristol-Myers Squibb (BMY) is suffering a loss of 3.4 percent after the company was downgraded to Neutral from Buy at Goldman Sachs. Bristol-Myers' price target was also reduced to $23 from $25.

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 are also seeing considerable strength, with the U.K.'s FTSE 100 Index and the German DAX Index both advancing 2.1 percent, while the French CAC 40 Index is posting a 2.0 percent gain.

In the bond market, treasuries are showing a lack of direction, with the benchmark ten-year note lingering near the unchanged line. The yield on the ten-year note is currently down less than a basis point at 2.994 percent.

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