Slower growth sparks rally in markets

The U.S. economy slowed down, but the stock market went up for a second day in a row Wednesday.

The gains were decisive. The Dow Jones industrial average jumped 149.83 points to 14,910.14.

The appraisal of the economy was just as clear, and contrary: The government reported that the economy grew at an annual rate of 1.8 percent in the first three months of the year, down significantly from the previous estimate of 2.4 percent and anemic by the standards of many economists.

It might seem counterintuitive for stocks and growth to go in opposite directions, but analysts said it made sense.

The slower growth made traders less anxious that the Federal Reserve might act too soon to end measures aimed at propping up the economy. Investors also seemed to believe they dumped too many stocks last week, when they panicked after the Fed outlined plans on how it might eventually end the measures.

The Standard & Poor's 500 index rose 0.96 percent to 1,603.26. The Nasdaq composite index rose 0.85 percent to 3,376.22. The yield on the 10-year Treasury note fell for the first time since June 14, slipping to 2.54 percent from 2.61 percent. The price of gold plunged $45.30 to $1,229.80 an ounce, its lowest price in three years. -- AP