The U.S. economy grew at a 1.8 annual rate in the first quarter, the weakest rate since last spring.
Donald Vaneck, center, of Barclays Capital, works on the floor of the New York Stock Exchange, in New York. (AP Photo/Henny Ray Abrams)By CHIP CUTTER
and DAVID K. RANDALL
NEW YORK — Stocks closed at another 2011 high Thursday despite modest U.S. economic growth in the first quarter.
The economy grew at a 1.8 annual rate between January and March. That's the weakest rate since last spring. Higher oil prices cut into consumer spending and bad weather slowed down construction projects.
Stocks rose modestly as investors bet that the economy would grow at a faster annual rate once gasoline prices stabilized.
The S&P 500 rose 4.82 points, or 0.4 percent, to 1,360.48. The Dow Jones industrial average rose 72.35, or 0.6 percent, to 12,763.31. The Nasdaq composite gained 2.65, or 0.1 percent, to 2,872.53.
The Russell 2000 index rose again, a day after reaching a record high. The index of small companies rose 3.24, or 0.4 percent, to 861.55.
Corporate earnings were mixed. Procter & Gamble Co. rose nearly 1 percent after the maker of Tide detergent and Pampers diapers reported higher earnings but cut its forecast for the year due to rising costs for raw materials.
Sprint Nextel Corp. rose nearly 7 percent. The company added twice as many wireless subscribers in the first quarter as analysts had expected.
Viacom Inc. rose 3.6 percent. The owner of MTV and Paramount Pictures reported that its income grew 53 percent thanks to popular shows such as "Jersey Shore" and an improved advertising market.
Exxon Mobil Corp. fell 0.5 percent even after the oil giant reported its best quarterly earnings since 2008. The world's largest publicly traded company earned $10.65 billion in the first quarter, up from $6.3 billion in the same period last year.
Steve Quirk, senior vice president of the trader group at TD Ameritrade, said investors have come to expect strong earnings from Exxon, so even a solid quarter doesn't necessarily lift its stock price. "The anticipation is so high right now," he said.
More people applied for unemployment benefits for the first time last week. The increase, the second in three weeks, suggests that the job market remains sluggish.
The weaker economic reports helped push bond prices higher and yields lower. The yield on the 10-year Treasury note fell to 3.32 percent from 3.35 percent late Wednesday.
Stock indexes hit 2011 highs on Wednesday after the Federal Reserve said it would keep interest rates low.
Two stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 4.2 billion shares.