NEW YORK — The stock market continued its climb Wednesday, despite a handful of disappointing economic reports.
It's a recurring theme in the stock market. Surprisingly bad news can still shake investors' nerves. But they often shrug off reports of sluggish economic growth, because it suggests that the Federal Reserve will keep pumping money into financial markets.
What's more, most investors expect choppy economic growth, so they take disappointing reports in stride, said Terry Sandven, chief equity strategist at U.S. Bank's wealth management group.
"It's a good backdrop for the market to trend higher," Sandven said.
Shortly after 12:30 p.m. Eastern Daylight Time, the Dow Jones industrial average was up 82 points at 15,297, a gain of 0.5 percent.
The Standard & Poor's 500 index rose 11 points to 1,661, up 0.7 percent. Both the Dow and the S&P 500 closed at all-time highs on Tuesday.
News of slowing manufacturing in the U.S. and a widespread slowdown in Europe weighed on financial markets in early trading, but the stock market quickly recovered.
"Yes, we're at all-time highs, but valuations are still attractive," Sandven said. The S&P 500 is trading at 15 times earnings for 2013, in line with the historical average of the closely watched price-to-earnings ratio.
Tepid economic growth also keeps interest rates low, which encourages investors to buy dividend-paying stocks instead. More than four out of every 10 companies in the S&P 500 pay a higher yield in dividends than U.S. government bonds pay in interest, according to Sandven.
The Federal Reserve said Wednesday that U.S. factories cut back sharply on production in April, as automakers produced fewer cars and most other industries scaled back. Manufacturing output dropped 0.4 percent in April from March, the third drop in four months and the biggest since October.
In other trading, the Nasdaq composite rose three points to 3,465.
Nine of the 10 industry groups in the S&P 500 edged higher. Energy stocks were the exception, as falling oil prices tugged the group lower. The price of crude oil fell 10 cents to $94.11 a barrel.
Google rose above $900 a share for the first time as the online search company opened its annual conference for software developers. The tech giant is expected to unveil new products and showcase the latest mobile devices running on its Android software. Google rose $21.83 to $908.93, an increase of 2 percent. Its stock is up 49 over the past year.
Macy's rose 3 percent, or $1.21, to $48.59 after posting a 20 percent rise in quarterly profit. The department-store chain also raised its quarterly dividend by a nickel to 25 cents and announced plans to buy an additional $1.5 billion of its own stock.
Deere & Co. slumped 4 percent. The maker of farm and construction equipment reported earnings that beat analysts' expectations, but it warned that cool spring temperatures and tepid demand for construction equipment will hinder sales growth this year. Deere's stock lost $4.12 to $89.66.
In the market for U.S. government bonds, the yield on the 10-year Treasury note slipped to 1.95 percent from 1.98 percent late Tuesday. Traders bought Treasurys, pushing yields down, partially in response to news of slower economic growth in Europe.