June 26 - Summary: Best two-day rally for stocks since early May as data downgrade makes an aggressive Fed rollback less likely; Gold headed for worst quarter in 45 years; Microsoft brings back the ''start'' button in Windows 8.1. Conway G. Gittens reports.
Stocks climb as data suggest the economy is not yet strong enough to grow without help from the Federal Reserve. The Dow, S&P 500 and Nasdaq each posting broad gains for the second day in a row. First quarter growth was sharply revised downward to 1.8 percent from 2.4 percent. Consumer spending was not as strong as first thought, leading investors to believe the Federal Reserve won't be so quick to remove some of the extra stimulus put in place to boost economic growth. Bond investors took that in mind, pushing Treasury yields lower, in what has been a rare move over the past week. Gold continues to be knocked around by uncertainty about U.S. monetary policy. The precious metal is on track to have its worst quarter since Reuters started keeping track 45 years ago. And Marc Chandler of Brown Brothers Harriman sees more downside ahead. SOUNDBITE: MARC CHANDLER, GLOBAL HEAD OF CURRENCY STRATEGY, BROWN BROTHERS HARRIMAN (ENGLISH) SAYING: "Many people had rushed into gold thinking that with the major industrialized countries pursuing quantitative easing and debasing their paper money that gold was a safe haven, but they've been - this idea has been rejected. Gold continues to sell-off and I'm afraid it has more to go because many people still believe in it. There hasn't been what we call a capitulation trade." Spot gold touched its lowest in almost three years in Wednesday trade. Microsoft's answer to criticism of Windows 8 is now ready for use. The preview of Windows 8.1 is the software giant's attempt to build a bridge with disgruntled consumers, while at the same time try to revamp the Windows brand for a world filled with apps, cloud storage, and multiple devices beyond PCs and laptops. The start button is back in the lower left corner. And a few other things familiar to users of older Windows versions are more accessible. Shares of Microsoft rallied to their best close in a week. Austerity reaches the shores of the United Kingdom. British Finance Minister George Osborne unveiled spending cuts of 11.5 billion pounds, or about $18 billion, for fiscal year 2015/16. Assistance for local governments was hardest hit. Looking at markets: UK stocks were up 1 percent, but gains were stronger in Germany and France.